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What to know ahead of Colorado trial seeking to block Kroger-Albertsons merger | News

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On Monday, the fate of the grocery merger between Kroger and Albertsons will be debated in court. Again.

The trial for the case brought forth by Colorado against the parent companies who run King Soopers and Safeway stores across the state will begin on Monday — marking the start of the third trial attempting to block the proposed $25 billion deal.

In Colorado, Kroger operates 148 King Soopers and City Market stores, while Albertsons runs 105 Safeway and Albertsons stores.

The Federal Trade Commission’s antitrust case against the grocers went to court in Oregon and ended on Sept. 17 after a three-week trial. It’s still unclear when the Oregon judge will rule on the case.

Another trial in Washington state began Sept. 16.

“We’re now prepared for what we believe will be the case that will end this merger and will prevent it from harming Coloradans,” Colorado Attorney General Phil Weiser said in a media conference Thursday.

Colorado AG sues to block Kroger-Albertsons merger

A Kroger spokesperson told The Denver Gazette in an email that the grocer is ready to argue why the merger is necessary.

“We look forward to making our case as for why Kroger must expand, adapt and most importantly, continue to lower prices to compete with global behemoths like Walmart, Costco and Amazon,” the statement said.

Here’s what to know ahead of the Colorado trial in the Denver District Court.

Why is Colorado suing Kroger and Albertsons?

In February, the state filed a lawsuit against Kroger and Albertsons alleging the proposed merger violated Colorado’s antitrust laws and would reduce grocery competition across the state.

The state attorney general said the deal would further concentrate the grocery market in Colorado creating a “mega grocery store” with power to raise prices, offer less variety of locally-sourced products and lead to store closures.

“We’re dealing with a situation that is already not great and we’re worried about it getting worse,” Weiser said.

He cited concerns from Palisade peach growers who distribute to both King Soopers and Safeway and claimed they’re worried about selling their fruits for a competitive price or for customers to find other kinds of local produce at a competitive price.

“It’s not enough to have Walmart as an alternative. “Walmart doesn’t offer the same type of local foods,” Weiser said.

Why Colorado Safeway stores wouldn’t be run by Kroger if merger goes through

The state is also arguing the Kroger and Albertsons plan to divest 91 stores in the state under the Safeway banner to C&S Wholesale Grocers would lead to store closures claiming its a distributor and not a retailer with enough experience to operate the stores, citing Albertsons’ failed divestitures to Haggen in 2015 when it merged with Safeway as precedent.

Kroger and Albertsons have repeatedly affirmed C&S Wholesale’s ability to run stores effectively.

The state is also alleging King Soopers and Safeway had an illegal “non-poach agreement” to prevent striking workers who are unionized from taking jobs at each other’s stores, which the grocers deny.







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FILE PHOTO: A shopper exits a King Soopers grocery store on Capitol Hill in Denver.






What is the grocers’ defense?

Like the FTC trial, Kroger aims to make the case over how much the grocery landscape has changed with the rise of supermarkets and online retailers like Walmart and Amazon.

The grocer has repeatedly said it would prices lower on “Day 1” of the merger. Weiser said he worries they are unenforceable “paper promises.”

In response, a Kroger spokesperson said customers will hold the stores accountable if prices don’t drop.

“These are not just paper commitments, but statements from several executives tested to under oath,” the spokesperson said Friday. “More importantly, customers will hold Kroger to account if it doesn’t lower prices in Albertsons stores after the merger closes. They care what prices are on the shelf, and they have an immediate way to show it – by going to the next store.”

The spokesperson added the Weiser’s attempted block would prevent Kroger from lowering prices in the state because the merger would give Kroger more purchasing power if combined with Albertsons.

United Food and Commercial Workers (UFCW) Local 7 has sided with the Attorney General on the case, expressing worry some stores may close and employees will be laid off.







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FILE PHOTO: Bryan Morton, with E & J Gallo Winery, helps stock an aisle with wine on Wednesday morning, March 1, 2023, at the Safeway grocery store on South Havana Street in Aurora, Colo. (Timothy Hurst/Denver Gazette)






How is this trial different? And what if the others finish first?

With two other cases ongoing, Weiser said he doubts either cases would come to a conclusion before Colorado’s will wrap up by Oct. 18.

Even if they do, he said, those could head to an appeals court.

Weiser said the state would continue to pursue blocking the merger until the deal falls apart.

“Until the parties walk away from the merger or a court stops it and the parties accept the ruling of the court, we have work to do,” Weiser said.

Kroger plans to sell Safeway brand in Colorado to help secure merger with Albertsons

While there may be many crossovers with the FTC’s and Washington’s trails, Weiser emphasizes why the state was pursuing its own case: He believes the merger could have local impacts for Colorado – especially in more rural parts of the state.

During one of the pretrial hearings, the Denver District Court judge tossed two potential state witnesses who were Gunnison and Canon City officials worried about the merger as they were added late to the potential witness list and state lawyers said they had other witnesses on their list with similar accounts.

“This case matters. It matters deeply to Colorado. We don’t take this step lightly.” Weiser said. “Colorado has never filed an antitrust case to stop a merger in state court and litigated the case. We’re doing it now and we’re doing it because it matters.”