SEATTLE—The merger of grocery giants Kroger and Albertsons were blocked today after a series of court rulings stating that the deal violates antitrust laws.
Today, King County Superior Court Judge Marshall Ferguson ruled that the proposed merger of grocery giants Kroger and Albertsons is unlawful and cannot go forward. The decision came following a September trial in Attorney General Bob Ferguson’s antitrust case challenging the merger. Today’s ruling is the first decision on the merits of the case amongst multiple state and federal challenges of the merger.
At the hearing, Judge Ferguson said: “In my view, the evidence convincingly shows that the current competition between Kroger and Albertsons stores is fierce in the State of Washington. By contrast, the divestiture buyer, C&S Wholesale, with its limited retail experience, will not be able to replicate the ferocity of that competition or compete in Washington against the colossus of a merged Kroger and Albertsons.”
“We’re standing up to mega-monopolies to keep prices down,” AG Ferguson said. “We went to court to block this illegal merger to protect Washingtonians’ struggling with high grocery prices and the workers whose jobs were at stake. This is an important victory for affordability, worker protections and the rule of law.”
Earlier on Tuesday, Oregon U.S. District Judge Adrienne Nelson issued a temporary injunction ruling that the $24.6 billion Kroger-Albertsons merger would limit competition and harm consumers.
Judge Nelson said that supermarkets Kroger and Albertsons are “distinct from other grocery retailers” and are not direct competitors to Walmart, Amazon and other companies who sell non-grocery goods.
“The overarching goals of antitrust law are not met,” Nelson wrote in the decision.
The Oregon lawsuit was filed in late February by the Federal Trade Commission and attorneys general from eight states and the District of Columbia. This would have been the largest merger in US supermarket history which was announced in 2022. The companies own dozens of grocery chains, including Safeway, Vons, Harris Teeter and Fred Meyer (QFC).
Kroger and Albertsons employ mostly unionized workforces and, in their plea, stated a merger would save monies against non-union stores such as Walmart, Amazon and Costco. The grocers also face increased pressure from Aldi, the fast-growing German discount supermarket chain.
“The Courts found what we have seen in Washington state: Large-scale grocery store mergers like this one are more likely to raise grocery prices than provide any real benefits to shoppers. And right now we need to keep taking steps to lower costs,” said Senator Maria Cantwell.
Today’s decisions mean the merger cannot go forward. Kroger and Albertsons are the two largest supermarket chains in Washington and the second and fourth largest supermarket operators in the country. More than half of all supermarkets in Washington state are currently owned by either Kroger or Albertsons, and they account for more than 50% of all supermarket sales in the state. Albertsons owns Safeway and Haggen, while Kroger owns QFC and Fred Meyer.
Collectively, Kroger and Albertsons operate more than 300 supermarkets in Washington, including approximately 194 in the Seattle-Tacoma-Bellevue metropolitan area. They currently have more than 700,000 employees in nearly 5,000 stores across 49 states. They have combined annual revenue in excess of $200 billion.
Kroger committed to lowering grocery prices by $1 billion if the merger followed through. The latest data shows that since 2020, grocery prices have risen 23.3 percent.
Ferguson filed his antitrust lawsuit in January in King County Superior Court, seeking to block the merger of Kroger and Albertsons. Ferguson asserts the merger violates Washington antitrust law, eliminates Kroger’s closest competitor and decreases customer choice.
SOURCE: Office of the Washington State Attorney General with additions by the Lynnwood Times
Author: Lynnwood Times Staff
