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Washington state sues to block Kroger, Albertsons grocery merger

Washington Attorney General Bob Ferguson claims the merger would raise prices and hurt consumers, specifically in areas where the two are competitors.
Washington state sues to block Kroger, Albertsons grocery merger
Posted at 10:08 AM, Jan 16, 2024
and last updated 2024-01-16 12:08:46-05

The state of Washington is suing to block the proposed merger of massive grocery chains Kroger and Albertsons.

In a lawsuit filed in King County Superior Court Monday, Washington Attorney General Bob Ferguson claims the $25 billion deal would monopolize the supermarket industry in his state, where the two retailers are responsible for over half of all grocery sales.

"The prices of groceries is already too high," Ferguson said on social media. "These large companies are saying publicly that this merger will decrease prices, but our investigation uncovered internal communications where executives admit that prices will not go down. We will continue fighting for affordability and choice."

It's been over a year since Kroger and Albertsons announced plans to combine the nation's two largest supermarket chains int a 4,500-store giant. They argue that the larger company will help reduce consumer prices and boost wages for union workers, while being able to compete more effectively against rivals like Walmart and Amazon.

However, critics have argued that a merger would give the company too much control of the market — specifically in cities where the two chains are currently competitors.

SEE MORE: Kroger approaching finish line on acquisition of Albertsons grocery

Felix Chang, a University of Cincinnati law professor who teaches antitrust law, told Scripps News Cincinnati that he thinks market concentration may be the biggest issue potentially preventing the merger from being finalized. 

"I think regulators are really interested in ... the effect of concentration in certain markets, particularly upon labor and upon sellers," Chang said. "Grocery stores are really, really, important purchasers for manufacturers, for farmers. And the larger the purchaser, the more market power it has."

Kroger and Albertsons released a joint statement Monday saying the timeline for the merger had to be pushed back as the grocery giants continue talks with federal regulators and Washington officials. 

"In light of our continuing dialogue with the regulators, we are updating our anticipated closure timeline," the statement reads. "We currently anticipate that the closing will occur in the first half of Kroger's fiscal 2024. While this is longer than we originally thought, we knew it was a possibility and our merger agreement and divestiture plan accounted for such potential timing." 

Kroger's fiscal second quarter ends on Aug. 17, 2024.


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