OAN Staff Abril Elfi
5:19 PM – Monday, August 26, 2024
The Federal Trade Commission (FTC) trial has begun, with the agency continuing its push to block Kroger’s merger with Albertsons, alleging that the merger would “hurt customers and undermine competition” in the grocery store industry.
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On Monday, the FTC kicked off the trial, hoping to legally block the $25 million merger.
In October 2022, Kroger and Albertsons first announced the proposal of the merger and later revealed their full plan in September 2023.
To help the deal get approved by regulators, the companies have agreed to sell C&S Wholesale Grocers to nearly 600 locations.
In addition, Kroger has promised to cut grocery prices by $1 billion if the deal goes through, which would represent the biggest merger in grocery industry history.
However, soon after, the FTC and several states filed lawsuits to stop the deal, claiming that the merger would result in higher grocery prices for consumers and less bargaining power for unionized workers in the industry.
“Stopping this multibillion-dollar deal will keep in place the vigorous competition that acts as a check on rising grocery prices and spurs improvements in quality and innovation,” said FTC chief trial counsel Susan Musser in her opening statement on Monday.
In his opening statement, Kroger attorney Matthew Wolf said that the plan would immediately lower some prices for shoppers at Albertsons, where prices are 10-12% higher than at Kroger stores.
He continued, stating that FTC’s effort to block the deal shows: “they neither understand the industry nor the parties within it.”
Wolf added that the merger would also help the stores compete with rivals like Walmart as well as Costco and Whole Foods.
The FTC lawsuit is a prominent part of the Biden-Harris administration’s “consumer initiatives,” as is FTC Chair Lina Khan’s attempt to use antitrust law to increase worker mobility.
In Portland, Oregon, U.S. District Judge Adrienne Nelson is overseeing the case and is debating whether or not to put a stop to the transaction while the FTC’s internal judge investigates the potential effects of the merger on competition.
The trial, which is scheduled to run for roughly three weeks, will include testimonies regarding the competitiveness of the grocery business as well as C&S Wholesale Grocers’ capacity to manage the 579 divested stores it would acquire in the event that the Kroger-Albertsons merger goes through.
Trial dates for additional challenges from the states of Colorado and Washington follow the FTC case, in which the states of Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming, and the District of Columbia (D.C.) joined.
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