Kroger and Albertsons put their merger on hold

Kroger and Albertsons pause merger amid Colorado lawsuit and FTC challenges, impacting grocery competition, prices, and store ownership - ConsumerAffairs

Colorado joins the FTC in challenging the union in court

Kroger and Albertsons have pushed the “pause” button on their proposed mega-merger that would reshape the supermarket landscape across much of the U.S.

The two chains have announced their are temporarily suspending work on the merger while the courts hear a lawsuit brought by the Colorado Attorney General’s Office that seeks to permanently block the union.

“I am pleased that Kroger and Albertsons agreed to halt their plans to merge until the court rules on the state’s lawsuit to permanently block the grocery merger,” said Colorado Attorney General Phil Weiser. “This is great news for shoppers, workers, farmers, and other suppliers, who can rest assured that this megamerger will not go into effect during harvest season and while kids are headed back to school.” 

The trial is scheduled to start on September 30, with the state arguing the merger would eliminate competition and impact food prices, jobs, and consumer choice.

Also at issue is the fate of 579 grocery stores under different brands that are owned and operated by either Kroger or Albertsons. The two chains agreed to sell the stores to C&S Wholesale Grocers to appease federal regulators who have raised antitrust concerns.

How the landscape could change

The sale might be jarring to some consumers who might find their favorite grocery store has become something different. For example, in the Washington, DC suburbs many Safeway and Harris Teeter stores could be transformed into Piggly Wiggly stores, one C&S Wholesale Grocers’ major brands.

While the Colorado lawsuit is the immediate threat to the proposed merger, the Federal Trade Commission (FTC) is also on record challenging the merger. In February, the FTC filed suit to block Kroger’s $24.6 billion acquisition of the Albertsons Companies, Inc.—alleging that the deal is anticompetitive.

The FTC charges that the proposed deal wouldl eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans – an argument echoed by the Colorado lawsuit.

Kroger operates thousands of stores across 36 states, which includes regional leaders such as Fred Meyer, Fry’s, Harris Teeter, King Soopers, Kroger, and Quality Food Centers (QFC). 

Albertsons also operates thousands of stores across 35 states under regional names including Albertsons, Haggen, Jewel-Osco, Pavilions, Safeway, and Vons. 

If the merger is completed, Kroger and Albertsons would operate more than 5,000 stores and approximately 4,000 retail pharmacies and would employ nearly 700,000 employees across 48 states.

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