Kroger Sues Government Over Blocking Merger With Albertsons

Kroger announced that it has filed a lawsuit against the Federal Trade Commission because the government agency has blocked the company’s planned merger with Albertsons.

Kroger is trying to block the FTC from pursuing an administrative proceeding challenging the merger of two major grocery chains. The company argues the administrative proceeding violates constitutional protections, while the government is also taking the case to federal court. Kroger wants the merger to be decided solely by a federal court.

“The merger of Kroger and Albertsons is squarely focused on delivering lower prices to customers from day one while securing the future of good-paying union jobs,” said Rodney McMullen, Kroger’s CEO. “We stand ready to defend this merger in upcoming federal court — the proper forum for this case — and we ask the court to stay what is an unlawful FTC in-house tribunal proceeding.”

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The companies had agreed to complete the merger in early spring 2024, but the Federal Trade Commission sued to block the move. The FTC alleged that the deal was “anti-competitive” and would lead to higher prices and fewer options for consumers.

“This mega-merger of supermarkets comes as American consumers have seen the cost of groceries steadily rise over the past few years. Kroger’s acquisition of Albertsons will lead to additional price increases for everyday grocery items, further exacerbating the financial wages that consumers across the country are facing today,” said Henry Liu, director of the FTC’s Bureau of Competition. “Essential grocery workers would also be harmed by this deal, facing the threat of lower wages, reduced benefits and worsening working conditions.”

A federal court is scheduled to begin hearing the case on Aug. 26. Kroger said the legal process could take years.

In addition, eight states and the District of Columbia have sued to stop the merger. But Ohio Attorney General Dave Yost recently threw his support behind Cincinnati-based Kroger.

“The FTC’s tunnel vision in this case risks chilling the very competition it seeks to protect,” Yost said last week. “The full picture of the competitive landscape shows no reason to further delay this deal.”

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Grocery chain leaders have denied accusations that the merger would stifle competition, saying the merger would cut costs, which they would then pass on to consumers.

In November, Kroger and Albertsons leaders testified in support of the merger before a skeptical congressional panel. Kroger CEO Rodney McMullen said the merger would be good for workers.

The two grocery chains said they plan to shed hundreds of stores if the merger is completed. As a result, Kroger and Albertsons will have 4,414 locations across the U.S.