Courts in both Washington and Oregon have blocked Kroger‘s acquisition of Albertsons. The deal dates back to 2022, but is increasingly in jeopardy.
Verdict: competition at risk
In 2022, US supermarket chains Kroger and Albertsons announced a merger. Kroger offered 24.6 billion dollars (more than 22 billion euros) to create the second-largest supermarket group in the United States. Together, the retailers would have more than 5,000 stores and 700,000 employees in 48 states.
In addition to Ahold Delhaize, which was itself bidding for Albertsons, the antitrust authorities immediately opposed the deal. In February of this year, the US Federal Trade Commission (FTC) filed a lawsuit to block the acquisition, and about nine states followed suit. This week, courts in Washington and Oregon rejected the deal in their respective districts.
Kroger and Albertsons had proposed selling 579 stores to C&S Wholesale Grocers to address antitrust concerns. But judges in both Oregon and Washington questioned C&S’s ability to act as a strong competitor, especially in states where both chains have dominant market positions. Antitrust officials fear higher consumer prices and worse working conditions.
Political and economic context
Beyond the legal implications, the case also has political dimensions. The White House hailed the ruling as a victory for consumers and small businesses. Rising food costs, which have increased by 25% since the pandemic, remain a hot topic in the US.
Both companies expressed disappointment with the rulings and are considering further legal action. In the face of Walmart and Amazon, Kroger and Albertsons are portraying themselves as defenders of traditional supermarkets. However, analysts are skeptical about the viability of the proposed merger, especially given the diminishing benefits since it was announced two years ago.
