Washington Attorney General (AG) Bob Ferguson has initiated a legal action to prevent the $24.6bn merger between Kroger and Albertsons, two of the largest supermarket chains in the US state.
The lawsuit, filed in King County Superior Court, aims to halt the nationwide merger, which Ferguson argues would significantly reduce consumer choice and competition in the grocery sector, potentially leading to higher prices.
The definitive agreement for the merger was reached in October 2022, but Ferguson contends that the consolidation of these major players would create a near-monopoly in several markets within Washington.
Despite Kroger and Albertsons’ proposal to sell more than 104 stores in the state, the AG believes this measure is insufficient to maintain a competitive landscape.
In Washington alone, the two companies operate more than 300 supermarkets, including 194 in the Seattle-Tacoma-Bellevue metropolitan area.
Ferguson’s concerns extend beyond consumer choice to the potential impact on employment.
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The divestment plan involves selling stores to a company that primarily operates as a wholesale supplier. This could jeopardise jobs and further limit shopping options for Washington residents.
The two retailers collectively employ more than 700,000 individuals across 5,000 stores in 49 states, with combined annual revenues surpassing $200bn.
In an attempt to alleviate antitrust concerns, the companies have proposed divesting 413 stores nationwide, including 104 in Washington, along with some distribution and brand assets.
But Ferguson still claims that the deal is against Washington antitrust law, and urged the court to issue an injunction to block the merger permanently nationwide.
He stated: “This merger is bad for Washington shoppers and workers. Free enterprise is built on companies competing, and that competition benefits consumers. Shoppers will have fewer choices and less competition, and, without a competitive marketplace, they will pay higher prices at the grocery store. That’s not right, and this lawsuit seeks to stop this harmful merger.”
In October 2023, California AG Rob Bonta considered filing a lawsuit to prevent the Kroger-Albertsons merger deal and in December, six lawmakers also called on the US Federal Trade Commission to block it.