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Monday, July 22, 2024

FTC Lawsuit Challenges Kroger and Albertsons Mega-Merger Impacting the Grocery Industry


Kroger Albertsons Merger Lawsuit

When it comes to the supermarket industry in the United States, sure, Kroger and Albertsons are two of the biggest names, and for good reasons too. But, did you know there was recently this Kroger Albertsons Merger Lawsuit filed against them by FTC? Why exactly? Well, chances are, this merger can actually change the American grocery sector significantly. Let’s get to know this case a little better.


You see, with names including Smith’s, Kroger, and Harris Teeter, the Cincinnati, Ohio-based supermarket chain has 2,750 locations in 35 states plus the District of Columbia. They stated in October 2022 that they will be able to better compete with Walmart, Amazon, and Costco after a $24.6 billion mega-merger.


What’s The Actual Merger Plan?

Why was this merger proposed in the first place? Well, to get together and build a grocery store giant that can compete even better. As anyone can see from a mile away, both of these businesses are actually aiming for enhanced services, more modern stores, and reduced costs for all. But is that the case? We don’t know yet! Half a billion dollars will go toward price cuts, while another $1.3 billion will be used to upgrade Albertsons locations.


What Is FTC So Focused On Antitrust Concerns?

Not everyone is happy about it, including the FTC. They are concerned that consumers may end up paying more as a result of less competition brought about by this combination. The merger has been criticized by FTC Competition Chief Henry Liu, who expressed concern that it might lead to higher food costs and lower wages and benefits for workers. The Federal Trade Commission (FTC) and the attorneys general of many states (including Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming) filed a federal court lawsuit to halt this.


Let’s Have A Look At Legal Side Of Things

You see, with an administrative complaint and a lawsuit in Oregon’s federal court, the FTC slowed down the merger quite a bit. They also advocate a temporary injunction to stop the merger during the development of the lawsuit.


Sure, as of 2024, Walmart is the biggest player in the game with a 22% market share, but these two (Kroger And Albertsons) aren’t far behind in the scene, you know? In the last few years or so, we have all seen grocery product costs soar greatly, like in two-digit percentage, and that’s pretty concerning if you think about it for a second. So, ultimately this Kroger Albertsons Merger Lawsuit holds a pretty huge significance, and you can’t just look past it because it will have an impact on your pocket down the line if this merger goes through.


With about 700,000 employees most of whom are members of the United Food and Commercial Workers (UFCW), Kroger and Albertsons are also major employers. The UFCW fears the combination would result in fewer benefits, lower salaries, and stricter working conditions. Fearing it would financially cripple Albertsonsons and hurt workers, they also slammed a $4 billion payment to Albertsonsons shareholders.


Parul is an experienced blogger, author and lawyer who also works as an SEO content writer, copywriter and social media enthusiast. She creates compelling legal content that engages readers and improves website visibility. Linkedin

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