Kroger-Albertsons merger trial: What to know about the proposed plan, possible impact on grocery prices
FILE-Image of a Kroger grocery store in Dallas, Texas, on Feb. 21, 2024. (Shelby Tauber/Bloomberg via Getty Images)
A three-week trial on the proposed Kroger-Albertsons started Monday as the Federal Trade Commission is pushing for a preliminary injunction that would block the merger while the agency’s complaint goes before an in-house administrative law judge.
The judge will hear from 40 witnesses, including the CEOs of Kroger and Albertsons, before deciding whether to issue the preliminary injunction.
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According to the Associated Press, if the judge chooses to temporarily block the merger, the FTC's in-house hearings will start on Oct. 1.
What is the proposed Kroger-Albertsons merger?
Kroger and Albertsons agreed to a $24.6 billion merger deal in October 2022, which the entities said would help them better compete with Walmart, Amazon and other major companies that have stepped into the grocery business, the Associated Press reported.
FOX Business noted that the companies agreed to temporarily delay their merger on July 27, 2024, as regulators pursued legal challenges to block the deal and a lawsuit filed by Colorado plays out. The move avoids the need for a preliminary injunction hearing that was scheduled to happen in September.
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According to the Associated Press, both companies are planning to sell 579 Kroger and Albertsons stores in locations where they overlap to C&S Wholesale Grocers, a New Hampshire grocery supplier and operator, for $2.9 billion. Under the initial plan, announced in September 2023, C&S planned to purchase 413 stores for $1.9 billion.
How many locations do Kroger and Albertsons have?
Kroger has 2,800 stores in 35 states, including brands like Ralphs, Smith’s, and Harris Teeter.
Albertsons runs 2,273 stores in 34 states, including brands like Safeway, Jewel Osco, and Shaw’s.
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The AP noted that Albertsons and Kroger combined employ roughly 710,000 workers.
What would be the market share in a Kroger-Albertsons merger?
If the merger happens, Kroger and Albertsons would control roughly 13% of the nation’s grocery market.
What is the FTC saying about the potential merger’s impact on grocery prices?
The Federal Trade Commission sued to prevent the $24.6 billion deal, with the agency arguing that it would stop competition and increase grocery prices. The FTC also alleges that employees' pay, and benefits would be reduced if Kroger and Albertsons no longer compete with each other.
What are Kroger and Albertsons saying about the merger?
When the proposed merger was announced in 2022, Kroger and Albertsons said the deal was necessary, so the retailers could better compete with Walmart, Amazon, and other industry rivals.
Kroger told the AP that the merging of the stores would offer better and quicker access to fresh food, with 66 distribution centers and 52 manufacturing plants. Combined, Kroger and Albertsons operate in 48 states and the District of Columbia.
Kroger also shared with the AP that it would also reinvest roughly $500 million in price reductions, while spending $1.3 billion to improve Albertsons stores and $1 billion on higher worker pay and better benefits.