A group of Democratic Senators and Representatives has called on the Federal Trade Commission (FTC) to block the proposed $24.6 billion acquisition of Albertsons by Kroger, saying in a letter that the “merger will harm consumers, workers, farmers, and other food suppliers across the country.”
The letter to FTC Chair Lina Khan says that the plan to divest more than 400 stores in a sale to C&S Wholesale Grocers is “an attempt to assuage competition concerns raised by the merger,” and “will not ameliorate harms to consumers, workers, and the grocery industry as a whole if the merger is allowed. We urge you to oppose this proposed merger, regardless of the proposed divestiture.”
The lawmakers signing on to the letter include Sen. Elizabeth Warren (D-Massachusetts), Sen. Mazie Hirono (D-Hawaii), Sen. Cory Booker (D-New Jersey), Sen. Bernie Sanders (I-Vermont), Rep. Summer Lee (D-Pennsylvania), and Rep. Alexandria Ocasio-Cortez (D-New York).
CNBC writes that “the lawmakers are arguing that store divestitures as a remedy to mega-mergers often fail to maintain competitive conditions because companies have an incentive to ensure that the businesses they spin off do not succeed.”
Fox News reports that the Democratic opposition to the deal is not monolithic: “Another group of lawmakers, including Reps. Brian Fitzpatrick, R-Pa., Josh Gottheimer, D-N.J., and Greg Landsman, D-Ohio, wrote separately to the FTC in support of the merger.”
The argument in favor of the merger is that, because Kroger has pledged not to close any stores, distribution centers or manufacturing facilities, with no layoffs among front line employees, the greater scale will result in lower prices for consumers and higher wages for employees. The bottom line, both companies have said, is that the merger will enable the combined company to be more competitive with the likes of Walmart, Costco and Amazon.
KC’s View:
I’m beginning to feel like a broken record on this, but what has to be determined here – as much as possible – is whether it is more important for a combined Kroger/Albertsons entity to be able to compete upstream against Walmart, Costco and Amazon, as opposed to the potential impact downstream on smaller regional and independent retailers if Kroger/Albertsons have greater buying and pricing power.
The antitrust laws that worked when Teddy Roosevelt was president – or, for that matter, when Ronald Reagan was president – probably are not adequate for dealing with the competitive landscape in 2024. This is an important public policy discussion, and deserves more than a rubber stamp of approval by the FTC.
The post Lawmakers Ask FTC To Block Kroger-Albertsons Deal appeared first on MNB.
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