CINCINNATI — Kroger Co. CEO Rodney McMullen will be one of five witnesses who testify Tuesday before a Senate antitrust panel that will scrutinize Kroger’s proposed merger with the Albertsons grocery chain.
McMullen will join Albertsons CEO Vivek Sankaran in extolling the virtues of the $24.6 billion deal, while its potential downsides will be discussed by the head of a company that acquired Northern Kentucky-based Remke Markets in 2017.
Kroger plans to invest an additional $500 million in lower prices, $1 billion in increased wages and $1.3 billion to “enhance the customer experience” in Albertsons stores, the company told investors when the deal was announced in October. It also expects to save $1 billion over four years from merger-related synergies, or cost-cutting initiatives, that will include “improved sourcing, optimization of manufacturing and distribution networks, and technology investment amplification opportunities.”
Some critics have questioned whether Kroger will invest those cost savings in lower prices and higher wages for workers, while others worry the deal will give Kroger too much buying power.
“Tremendous economic power concentrated in the hands of a few grocery giants harms independent retailers and producers, the American consumer, and the U.S. economy,” Fresh Encounter Inc. CEO Michael Needler Jr told a House antitrust panel in January.
At that time, lawmakers were investigating supply chain consolidation during the pandemic.
“America’s food supply chain problems are a result of increasing concentration and unchecked buyer power by dominant retail chains who force suppliers to discriminate against independent grocery,” Needler said. “Grocery power buyers have taken advantage of the COVID-19 pandemic to further entrench their economic power at the expense of smaller competitors and producers.”
Needler is the last of five witnesses who will be asked about the Kroger-Albertsons merger at Tuesday's hearing, scheduled for 3 p.m. Other witnesses include Sumit Sharma, a senior researcher who studies competition and antitrust matters for for Consumer Reports, and Economics Professor Andrew Sweeting from the University of Maryland.
The leaders of six United Food and Commercial Workers union locals are planning a Washington press conference Tuesday to call on state and federal leaders to block the merger.
On his way out of the Senate, Cincinnati Republican Rob Portman told WCPO 9 Anchor Tanya O’Rourke that Kroger has numbers to back up its claim that the merger will lead to reduced cost and lower prices. He isn’t sure how Tuesday’s hearing will go, but he supports the deal.
“Kroger is a hometown company,” he said. “And it's fantastic that they are growing. And they'll add more people here in Cincinnati and their corporate offices as a result. Also, you look at the analysis, they will not be the biggest grocery store chain in America, even after they do this merger, because Walmart's much bigger. So, in terms of the antitrust issues, they will still be in a very competitive market.”
