In order to prevent inflation, the US states, along with the Federal Trade Commission (FTC), have planned to stop two of the major grocery chains, Kroger and Albertsons, from merging and making a joint alliance.
According to a combined report by FTC and the US states, Kroger’s has planned to purchase its main trading rival Albertsons for $24.6 billion. This purchase will end the competition in the market, “exacerbating the financial strain consumers across the country face today.” Both parties to the deal are determined to finalize it, and therefore, the US has to involve the court.
US President Joe Biden is under continuous pressure to prove that his government is addressing the issue of inflation, which has increased by 25% in the last 4 years. This court battle started at a time when the fight against high prices was at its peak.
The operator for big brands like Harris Teeter, Fred Meyer, etc. has planned the purchase of Albertsons since the end of 2022, claiming that it would benefit it to become a market rival of big names like Walmart and Amazon. The collaboration between these two market joints was supposed to employ 700,000 citizens in 5,000 stores spread across 48 out of 50 states in the US.
The critics, however, have urged the government and authorities to prevent the deal from taking place. While appreciating the resistance against this merger, the co-executive director of the Institute of Local Self-Reliance, Stacy Mitchell, said, “This decision shows that the FTC understands how the outsized power of big retailers is damaging the entire food system. There was no upside to this merger for anybody other than the top executives at these two companies and their investors.”
In order to minimize the concerns of trade commissions, Kroger decided to hand over 400 of its stores to different owners. According to Kroger and Albertsons, they had no plans to close branches, make any job cuts, or unemployed the workers. Their simple plan was to make investments while staying within a low budget.
After the announcement made by FTC, Kroger claimed that blocking the merger would only cause difficulties for the customers as the prices would increase. Through this legal case against the Kroger-Albertsons deal, the competing rivals, who do not care to employ the labour union members, will become strong.
In a statement, Kroger said, “Contrary to the FTC’s statements, blocking Kroger’s merger with Albertsons Companies will actually harm the very people the FTC purports to serve: America’s consumers and workers. The merging parties look forward to litigating this action in court.”
The FTC has always opposed mergers by suing to block them under Biden’s presidency. These mergers are in the fields of technology, health, and air transport. FTC has lost some of the battles against a few mergers while winning a few too in court.
