Two separate rulings on Tuesday blocked the merger of supermarket giants Kroger and Albertsons.
The ruling by U.S. District Judges Adrian Nelson and Marshall Ferguson reflects widespread concerns about the potential harm to competition and consumer choice that affects millions of Americans. Judge Nelson of Portland, Oregon issued A preliminary injunction will be granted after a detailed three-week hearing.
Nelson raised the possibility that the Federal Trade Commission (FTC), which is challenging the merger, could succeed in proving that the $24.6 billion deal significantly reduces competition in the market. The preliminary injunction seeks to maintain the status quo until the FTC’s in-house administrative judge can further evaluate the merger’s impact.
A few hours later, in Seattle, Judge Ferguson issued Permanent injunctions prohibiting mergers, particularly within the state, as a clear threat to the maintenance of competitive market conditions. His decision reflects a concerted effort to protect Washington consumers and workers from the consolidation harms that could result from such a mega-merger.
WESTCHESTER, Calif. – July 10, 2024 – Shoppers walk through the aisles of Vons Market in Westchester, which has served the community since 1952. (Genaro Molina/Los Angeles Times via Getty Images)
“We’re taking on big monopolies to keep prices down,” Ferguson said. “We went to court to block this illegal merger to protect Washingtonians who suffer from high food prices and workers whose jobs are at risk. This is an important victory for workers, workers and the rule of law.”
The merger was first announced in 2022 and has faced intense scrutiny from federal and state regulators. The FTC lawsuit, backed by attorneys general from nine states and the District of Columbia, argues that the Kroger-Albertsons merger would not only reduce consumer choice, but also drive up prices and reduce wage competition in the grocery sector. insisted.
Following the court’s decision, representatives for Kroger and Albertsons expressed disappointment and are currently considering next steps, including appealing the ruling, NBC News reported. reported. (Related article: More Americans are turning to discount grocery stores as prices soar)
“During the process, we made clear how the proposed merger would increase competition, lower prices, raise employee wages, protect union jobs, and improve the shopping experience for our customers. “We have carefully considered the court’s opinion and are evaluating our options in accordance with the merger agreement,” Albertsons said in a statement.
Both companies defend the merger as a strategic move to better compete with retail giants like Walmart, Costco and Amazon, Associated Press reported. Albertsons even said that blocking the merger could lead to dire consequences, including layoffs, store closures and exits from some markets.
Under the merger agreement, Kroger and Albertsons planned to sell 579 stores to C&S Wholesale Grocers to alleviate concerns about overlapping markets, according to the Associated Press. In February 2024, the Biden administration launched a legal challenge to the merger of The Kroger Company and Albertsons Companies Inc., arguing that the $24.6 billion deal stifled competition.
“This supermarket mega-merger is a sign that American consumers have seen steadily rising grocery prices over the past several years,” Henry Liu, director of the FTC’s Bureau of Competition, said in a statement. We received the request and realized it.”
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