The U.S. Federal Trade Commission (FTC), charged with promoting consumer rights, sued to block what could be the largest supermarket merger in U.S. history. A merger of Kroger and Albertsons, the FTC said, would lead to higher prices, store closures, and job losses.
The $25-billion deal, announced in November 2022, has seen opposition from the United Food and Commercial Workers Union, as well as multiple senators and attorneys general. The FTC suit is one of the merger’s greatest challenges so far.
“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,” said Henry Liu, director of the FTC’s Bureau of Competition, in a public 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.”
As part of the merger plans, the companies intend to divest 413 stores, eight distribution centers, and five private label brands to C&S Wholesale Grocers. The FTC suit has deemed the measures “inadequate”.
“The combined Kroger and Albertsons would have more leverage to impose subpar terms on union grocery workers that slow improvements to wages, worsen benefits, and potentially degrade working conditions,” an FTC statement said.
Kroger responded Monday, stating it would challenge the suit in court and stand behind the merger. Kroger said it would not negatively impact grocery competition and would result in lower prices for consumers and more investments in employee wages.