7 Sec-of-States oppose Kroger (Fred Meyer) and Albertsons merger

By Taxpayer Association of Oregon Foundation

Last October Kroger announced its plans to acquire Albertsons for $24.6 billion and now officials in seven states have objected to the deal.

A Kroger spokesperson defended the merger saying it would be good for consumers and store workers and only large, non-unionized competitors such as Walmart and Amazon would be the parties to benefit if it were blocked.

Walmart has 25% of the nation’s grocery market share, with 4,616 stores in the U.S.   If the Kroger/Albertsons merger goes through they will initially have 5,000 stores across the nation.

Usually, State Attorneys General coordinate with the FTC on merger reviews, but seven Democrat Secretaries of State from Arizona, Colorado, Maine, Minnesota, New Mexico, Rhode Island and Vermont voiced their opposition to Kroger’s planned acquisition of Albertsons with the FTC.

In their letter to the FTC, they said “As secretaries of state, we are concerned about preserving a competitive grocery market that ensures fair competition and protects consumers and workers.  We are strongly opposed to this merger and urge you to stop this corporate consolidation that is draining Americans of their hard-earned wages and livelihoods.”

The group also objected that “Under the terms of the merger, Kroger and Albertsons will also need to divest up to 400 stores.  It is likely the corporations will target the lowest performing stores – often those in low-income communities.  This will certainly exacerbate issues of food accessibility and affordability that already exist.”

Kroger and Albertsons overlap in several markets including in Portland, Oregon.

Grocers have low profit margins of around only 2.2%.  They are facing industry disruption with organized retail theft, changing consumer habits, new technology, and intense competition.  While consumers are faced with rising food costs – paying 5% more for food than they were a year ago.