Kroger announced that it has filed a lawsuit against the Federal Trade Commission as the government agency has stood in the way of the company's proposed merger with Albertsons.
Kroger is attempting to stop the FTC from administrative proceedings that challenge the merger of the two large grocery chains. The company argues that the administrative proceedings violate constitutional protections while the government also takes the issue to federal court. Kroger wants the merger only to be decided in federal court.
"The merger between Kroger and Albertsons is squarely focused on ensuring we bring customers lower prices starting day one while securing the future of good-paying union jobs," said Rodney McMullen, Kroger CEO. "We stand prepared to defend this merger in the upcoming trial in federal court – the appropriate venue for this matter to be heard – and we are asking the Court to halt what amounts to an unlawful proceeding before the FTC's own in-house tribunal."
RELATED STORY | Kroger CEO took an 18% pay cut but still made $15.5 million in 2023
The companies had set early 2024 as a target to complete the merger, but the Federal Trade Commission has sued to block the move. The FTC alleged that the deal is "anticompetitive" and would lead to higher prices and fewer options for consumers.
“This supermarket mega merger comes as American consumers have seen the cost of groceries rise steadily over the past few years. Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today,” said Henry Liu, director of the FTC’s Bureau of Competition. “Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating.”
A federal court is scheduled to begin considering the case on August 26. Kroger has said that the legal process could take years to play out.
Additionally, eight states and the District of Columbia have sued to stop the merger. But recently, Ohio Attorney General Dave Yost lent his support to Kroger, which is headquartered in Cincinnati.
“The FTC’s tunnel vision in this case risks chilling the very competition that it seeks to protect,” Yost said last week. “A full view of the competitive landscape shows no reason to delay this deal further.”
RELATED STORY | Kroger and Albertsons announce plans to offload hundreds of locations amid merger
Leaders of the grocery chains have disputed allegations that the merger would stifle competition. They have claimed that the merger would lower costs, which they would then pass on to consumers.
In November, leaders from Kroger and Albertsons testified in support of the merger before a skeptical Congressional panel. Kroger CEO Rodney McMullen stated the merger would be beneficial to employees.
The two grocery chains have said if the merger is finalized, they plan to offload hundreds of stores. As a result, Kroger and Albertsons would have 4,414 locations throughout the U.S.
