ARLINGTON, VIRGINIA – The American Consumer Institute is disappointed that Colorado’s attorney general filed a lawsuit to block the proposed merger between Kroger and Albertsons. We believe the allegations made in this lawsuit are unfounded and fail to account for the many benefits that a successful merger between the grocery chains would unlock for American consumers, such as lower prices and more product offerings.
Far from eliminating competition in the grocery market, as the lawsuit alleges, such a merger would enhance competition. Kroger-Albertsons would be better able to compete with larger industry players like Walmart, Amazon, and Costco. A successful merger would force these companies to compete for customers, creating a strong incentive for them to lower prices and provide better customer services.
Concerns that the merger would lead to concentrated local markets are also misplaced. Kroger has already agreed to sell 413 stores in overlapping markets, and it is prepared to sell an additional 237 stores if asked to do so by the Federal Trade Commission (FTC). Therefore, no competitors are being eliminated in these local markets.
Kroger and Albertsons have also stated that the merger would not harm consumers and workers. The companies have no plans to close any stores or lay off workers. In addition, they plan to use $500 million in new cost-savings generated from the merger to lower consumer prices. Additional plans to improve employee wages and benefits, as well as customer service, are also in the works. Some labor unions, such as a local branch of the United Food and Commercial Workers union, have also come out in support of the merger, revealing robust support for the merger among workers themselves.
There is no empirical evidence to support the notion that the merger would be harmful to consumers. Therefore, we urge Colorado and the FTC to consider the many positive benefits a successful Kroger-Albertsons merger would unlock for consumers.
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