ARLINGTON, VIRGINIA – The American Consumer Institute (ACI) is disappointed to learn today that the Federal Trade Commission (FTC) has filed a lawsuit seeking to block the proposed merger between Kroger and Albertsons. We believe that a successful Kroger-Albertsons merger would not only enhance market competition but also unlock new benefits for consumers and workers alike.
Despite repeated claims that the merger would erode competition in the grocery market by increasing industry concentration, all available evidence suggests that the merger would improve competition. This is because a successful merger would allow the grocery chains to compete more effectively with larger industry players like Walmart, Amazon, and Costo, which each currently maintain a significant size advantage over Kroger and Albertsons. A combined Kroger-Albertsons would be better able to compete for customers, incentivizing them to keep prices low and provide good customer service.
Kroger and Albertson have also both stated on numerous occasions that no harm will come to consumers or workers should the merger be allowed to proceed. The companies have no plans to lay off workers (Some unions have recently endorsed the merger) or close stores and have already agreed to sell 413 stores in overlapping markets to alleviate any lingering concerns about the merger’s impact on market concentration. They have also indicated that they are prepared to sell even more stores if asked to do so by the Commission.
The companies have pledged to use new cost-savings generated from the merger to lower prices and benefit consumers. They also plan to invest $1 billion in improving associate compensation and spend an additional $1.3 billion on improving customer service at Albertsons stores. All these gains are now in significant jeopardy due to the FTC’s decision to sue.
ACI believes the allegations made against the Kroger-Albertsons merger are unfounded and that this lawsuit could do significant damage to the very people that the FTC claims it is trying to protect. We strongly urge the Commission to reconsider this deeply flawed course of action and acknowledge the many benefits that such a merger would unlock for consumers and workers.
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