1. Channel: Grocery

Kroger/Albertsons vs. FTC Court Case Scheduled For Late August

Mark your calendars.  Set your alarm.  August 26, 2024, has been set foe the beginning of the trial that will determine whether the Federal Trade Commission (FTC) will be able to block Kroger’s $24.6 acquisition of Albertsons.

The trial will take place in the Us District Court in Portland, Oregon, and is expected to last three weeks.

Bloomberg reports that “the FTC, eight states and Washington D.C. sued last month, claiming the combination of the two largest US supermarket chains would lead to lower wages for workers and higher prices for consumers. Kroger and Albertsons say they need the merger to compete with larger, non-unionized rivals Amazon.com Inc., Walmart Inc. and Costco Wholesale Corp.

“The companies have pledged to invest $500 million to cut prices and $1 billion to raise worker wages and benefits, in addition to $1.3 billion to improve Albertsons stores. They also agreed to divest at least 413 stores to Piggly Wiggly chain owner C&S Wholesale Grocers Inc., though the FTC has said the remedy is inadequate.”

KC’s View:

Not surprisingly, both sides are bunkered down and preparing for battle, utterly convinced of the rightness of their positions in the case.  

I still think that to some degree it is a coin flip.  I think that Kroger and Albertsons are correct that the deal will allow them to compete more effectively with the likes of Walmart, Amazon and Costco, all of which have to be considered grocery competitors even if they technically sit outside the lines of traditional supermarket competitors.  And I think Kroger can make the case that it has traditionally lowered prices and preserved front line jobs after it has acquired companies.

That said, there continues to be considerable industry skepticism about whether the hundreds of stores that would be divested to C&S Wholesale Grocers will continue to operate down the road;  the misbegotten Haggen deal of several years ago left a bad taste in a lot of people’s mouths.  And I think there is justifiable concern that this deal could result in a tough time for the smaller retailers and suppliers downstream of the behemoths.

I’m going to think of this trial as a kind of “Labor Day weekend show.”

The post Kroger/Albertsons vs. FTC Court Case Scheduled For Late August appeared first on MNB.

View Original Article
Do you like MorningNewsBeat's articles? Follow on social!