FTC moves to block Kroger acquisition of Albertson's grocery stores

Feb. 26 (UPI) -- The Federal Trade Commission is suing to stop the proposed $24.6 billion acquisition of Albertson's Companies by The Kroger Company, according to court documents filed Monday.

The FTC claims the tentative deal between the two massive grocery chains would be anticompetitive and lead to higher prices for consumers, as well as worse conditions for workers.

"This supermarket mega merger comes as American consumers have seen the cost of groceries rise steadily over the past few years. Kroger's acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today," FTC Bureau of Competition Director Henry Liu said in a statement.

"Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating."

If completed, the deal would represent the largest supermarket merger in U.S. history.

The FTC administrative complaint issued Monday authorizes a lawsuit in federal court to block the proposed acquisition. That lawsuit remains pending, and is contingent on the outcome of the FTC's administrative proceedings.

Kroger fired back at the FTC order Monday.

The third-largest retailer in the United States said blocking the deal would hurt both consumers and workers.

"The FTC's decision makes it more likely that America's consumers will see higher food prices and fewer grocery stores at a time when communities across the country are already facing high inflation and food deserts," the Cincinnati-based chain said in a statement.

"In fact, this decision only strengthens larger, non-unionized retailers like Walmart, Costco and Amazon by allowing them to further increase their overwhelming and growing dominance of the grocery industry."

Kroger said its business model is to take costs out of the business and invest in lowering consumer prices in its stores, pointing out it has reduced prices every year since 2003.

The store has also added 100,000 unionized positions since 2012 and views the merger as the "best way to secure [further] union jobs."

Albertson's had not issued a public statement on the FTC decision as of 2 p.m. EST Monday.

Kroger currently operates stores over 36 states, including several under regional names such as Fred Meyer and Quality Food Centers.

Albertsons also operates in 35 states with regional brands including Haggen and Safeway.

Kroger and Idaho-based Albertson's first announced the tentative deal in October of 2022. If finalized, the deal would create a chain of more than 5,000 stores and 4,000 pharmacies employing approximately 700,000 workers and reaching 85 million American households across 48 states.

At the time, Kroger Chairman and CEO Rodney McMullen said the acquisition would accelerate the company's "position as a more compelling alternative to larger and non-union competitors."