CINCINNATI — The secretaries of state in Colorado, Arizona and five other states today asked the Federal Trade Commission to block Kroger Co.'s $24 billion acquisition of Albertsons, claiming the deal will lead to higher prices while harming farmers and small businesses.
“This corporate merger will put an even larger strain on American families who are already struggling to pay the bills and keep food on the table,” said the letter. “Government must stand up to corporate greed as it has done in the past to ensure there is a competitive marketplace for essential goods and services.”
The seven states — including New Mexico, Vermont, Minnesota, Rhode Island and Maine — claim they are home to 4,996 stores that could be impacted by the merger.
Kroger responded to the letter with a statement:
“Kroger joining with Albertsons will mean lower prices and more choices for more customers in more communities, higher wages and more industry-leading benefits for associates and growing union jobs. The only parties who would benefit if this merger is not completed are large, non-unionized competitors such as Walmart and Amazon.”
Kroger has a 75% chance of completing the proposed merger, but it might have to fight the FTC in court to get the deal done, said Eric Fruits, an antitrust expert and senior scholar for the International Center for Law & Economics in Portland Oregon.
“For the past 25-30 years, almost every single grocery merger has been allowed to go through with these spinoffs, or what are known as divestitures,” said Fruits, a Sycamore High School graduate who recently co-authored a detailed analysis of the likely legal arguments in the case. “My guess is that’s what Kroger and Albertsons are going to offer. The real question is whether or not the Federal Trade Commission will take that offer. And if they don’t, they could go to court and the judge could say, ‘This seems like a reasonable remedy. We’ll let you spin off the stores.’”
When Kroger announced the planned merger last October, it said it hoped to complete the deal by early next year. Fruits doesn’t think that can happen if the case goes to court.
“I would think that there’s bigger fish to fry than the Kroger-Albertsons merger,” said Fruits. “But you just don’t know what sort of political pressure these federal trade commissioners are under to try to show that they’re doing something big. And this is something big that they can try to block.”
