U.S. Senators, industry orgs oppose proposed Kroger-Albertsons merger

Several U.S. Senators and industry groups are taking a stance against the proposed merger of Kroger and Albertsons, the two largest grocery chains in the country.

U.S. Sens. Amy Klobuchar (D-Minn.), chairwoman and ranking member of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, and Mike Lee (R-Utah) announced they will hold a hearing in November to examine the proposed merger.

“As the chair and ranking member of the subcommittee on Competition Policy, Antitrust, and Consumer Rights, we have serious concerns about the proposed transaction between Kroger and Albertsons," Klobuchar said. "The grocery industry is essential, and we must ensure that it remains competitive so that American families can afford to put food on the table. We will hold a hearing focused on this proposed merger and the consequences consumers may face if this deal moves forward.”

Sens. Richard Blumenthal (D-Conn.) and Cory Booker (D-N.J.) joined Klobuchar in signing a letter that was sent on Oct. 18 to Federal Trade Commission chair Lina Khan.

[Read more: Kroger to acquire Albertsons for $24.6 billion]

The letter stated, "We write to express our serious concern about the recently announced merger between Kroger and Albertsons and to ask for your assurance that this proposed deal will be carefully and thoroughly investigated by the Federal Trade Commission. As food prices remain elevated, too many American families are struggling to put food on the table for their families. These issues are worse for families in areas without access to affordable, nutritious food. And across the country, more than six million American children suffer from not having enough food."

The Senators continued, "Against that backdrop, last week the nation’s two largest grocery chains, Kroger and Albertsons, announced a proposed $25 billion merger. This merger raises considerable antitrust concerns. The grocery industry is essential to daily life, and Americans need the benefits that robust competition brings, namely lower prices, higher quality, and innovation. As you are aware, the grocery industry has become increasingly consolidated. When Albertsons merged with Safeway in 2015, the FTC found that the merger was likely to harm competition in 130 separate markets and required the company to sell more than 150 stores. Given the increases in food prices recently, we question whether the divestitures that the agency secured when approving that deal were sufficient, especially since Albertsons was allowed to buy back many of the stores that the FTC required it to sell."

The letter concluded, "We understand that last fall, the FTC launched an investigation into grocery prices and the availability of food products, sending data requests to a number of companies, including Kroger. We ask that the agency incorporate the findings from that investigation in its analysis of this newly proposed merger. We stand ready to assist the FTC in protecting Americans from anticompetitive mergers in all industries, and especially as to industries such as groceries, upon which all of us depend every day."

[Read more: Kroger embarks on hiring spree]

Sen. Elizabeth Warren, (D-Mass.) also expressed opposition to the proposed merger, stating in a Twitter post, “I’m calling on the FTC to block this deal. Big grocery chains like Kroger and Albertsons are already gouging families with inflated prices. More mergers and less competition would mean even higher prices—and layoffs for employees.”

U.S. Sen. Bernie Sanders, (D-Vt.) also issued a statement on Twitter in opposition of the merger. “At a time when food prices are soaring as a result of corporate greed, it would be an absolute disaster to allow Kroger, the 2nd largest grocery store in America, to merge with Albertsons, the 4th largest grocery store in America. The Biden Administration must reject this deal,” he said.

The National Grocers Association also expressed opposition to the proposed merger. “A merger of the nation’s top two grocery chains should raise serious questions about a single supermarket giant gaining unprecedented dominance over the nation’s food supply chain,” said Greg Ferrara, NGA president and CEO. “A merger would not only put smaller competitors at an unfair disadvantage, but also increase anticompetitive buyer power over grocery suppliers, which ultimately would harm consumers. It is our expectation that this deal will receive rigorous scrutiny from federal antitrust enforcers.”

[Read more: Kroger reports strong Q2 results, raises full-year guidance] 

NGA filed comments in April of this year to the U.S. Department of Justice Antitrust Division and U.S. Federal Trade Commission’s Jan.18, 2022 Request for Information on Merger Enforcement. NGA issued a White Paper in March of 2021 about the anticompetitive impacts of buyer power on the grocery supply chain.

The American Economic Liberties Project also expressed opposition to the proposed merger. “There is no reason to allow two of the biggest supermarket chains in the country to merge — especially with food prices already soaring,” Sarah Miller, executive director of the American Economic Liberties Project, said. “With 60% of grocery sales concentrated among just five national chains, a Kroger-Albertsons deal would squeeze consumers already struggling to afford food, crush workers fighting for fair wages and destroy independent, community stores. This merger is a cut and dry case of monopoly power, and enforcers should block it.”