Warren, Hirono, Sanders, Booker and Lawmakers Urge FTC to Block Kroger-Albertsons Merger and Reject Flawed Structural Remedies
“A Kroger-Albertsons merger would net the five largest food retail companies control of 55 percent of all grocery sales. The newly merged entity could use its dominant position to further control and ultimately raise consumer prices.” Senators respond to proposed divestiture of 413 stores to resolve antitrust concerns: “This merger will harm consumers, workers, farmers, and other food suppliers across the country, and the proposed divestiture will not resolve the concerns.”
Washington, D.C. - United States Senator Elizabeth Warren (D-Mass) along with Mazie Hirono (D-Hawaii), Bernie Sanders (I-VT), Cory Booker (D-N.J.), and Reps. Summer Lee (D-Pa.) and Alexandria Ocasio-Cortez (D-N.Y.) sent a letter to the Federal Trade Commission (FTC) to express their opposition to the proposed merger of major grocery store chains Kroger and Albertsons. The lawmakers explain that despite the companies’ recent proposal to divest 413 stores to C&S Wholesale Grocers (C&S), this merger would still harm consumers, workers, and the grocery industry as a whole. They urge the FTC to oppose the merger, regardless of the proposed divestiture. This letter comes as the FTC’s deadline to act on the merger approaches on December 15, and as shoppers look to save on holiday food prices.
A Kroger-Albertsons merger would net the five largest food retail companies control of 55 percent of all grocery sales, and would result in a duopoly with Walmart, with the two corporations controlling more than 70 percent of the grocery market in over 160 cities across the country. As a result, the newly merged entity could use its dominant position to further control and ultimately raise consumer prices, while also reducing job competition, decreasing wages, and decreasing the bargaining power of organized labor.
A massive grocery merger also increases the risk that firms will violate the Robinson- Patman Act, a longstanding but under-enforced law that prohibits sellers from engaging in price discrimination among different buyers.
In September 2023, Kroger and Albertsons proposed a structural remedy in which 413 stores and other assets would be acquired by C&S Wholesale Grocers.
“As Members of Congress have previously raised, structural and behavioral remedies are difficult to administer and enforce and cease to be binding once the term of the agreement ends, and they often fail to maintain competitive conditions because, as stated previously, companies have an incentive to ensure that the businesses they spin off do not succeed. Furthermore, they encourage companies to ‘litigate the fix’ by proposing remedies during ongoing litigation in order to distract a judge’s focus from the original antitrust violations of the merger. But in addition to these general concerns, past experience with Albertsons’ structural remedies indicates that the new proposal will not cure the anticompetitive harms of the deal,” continued the lawmakers.
“This merger will harm consumers, workers, farmers, and other food suppliers across the country, and the proposed divestiture will not resolve the concerns. We ask that the FTC should use its authority under the Clayton Act, the Sherman Act, and the Federal Trade Commission Act to prevent the companies from merging,” concluded the lawmakers.
Since Kroger and Albertsons proposed the merger, Senator Warren has expressed concerns about the deal. In October 2022, Senators Warren, Sanders, and Rep. Schakowsky wrote to the FTC urging the agency to reject the proposed merger. The lawmakers outlined Kroger and Albertsons’ records of profiteering and worker exploitation, and explained that those conditions would worsen if this merger is finalized.
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