FTC trial over Kroger-Albertsons merger begins
The U.S. Federal Trade Commission’s lawsuit to block the Kroger-Albertson’s merger went to trial on Aug. 26 in federal court in Portland, Ore.
The FTC argues that Kroger's $25 billion merger with Albertsons is not good for shoppers and workers. The FTC and several states sued to block the merger in February, saying it would eliminate competition between the top two traditional supermarket chains in the U.S., resulting in higher prices for consumers and less bargaining power for unionized grocery workers, per a Reuters report.
The report also noted that the trial is expected to last around three weeks and will showcase evidence about how major grocery retailers and smaller rivals set prices and view competition in the industry.
[Related: Kroger files lawsuit against FTC]
Kroger and Albertsons are asking U.S. District Judge Adrienne Nelson to let the deal go ahead, saying the merger is necessary to compete with multinational corporations like Walmart, Costco and Amazon.com, which owns Whole Foods, per the report.
Kroger and Albertsons say the lawsuit's focus on traditional supermarkets ignores that consumers typically shop for food at a variety of locations including big-box stores like Target and dollar stores such as Dollar Tree, per the Reuters report.
Kroger has said it will sell 579 of the approximately 5,000 stores it would own if the deal is allowed to go through. Part of the trial will focus on whether buyer C&S Wholesale Grocers can successfully run them, per the report.
Kroger provided Drug Store News with a statement Monday from Tim Massa, chief people officer of Kroger, which said, “Kroger joining with Albertsons will mean lower prices for more customers, higher wages for associates, and expanded food access in more communities. Our merger will secure the long-term future of union jobs by building on Kroger’s track record of adding 100,000 union jobs since 2012 while union membership in the grocery industry was declining by hundreds of thousands of members."
[Read more: Kroger to lower prices following merger with Albertsons]
The statement continued, "Kroger, Albertsons and C&S are committed to honoring all current collective bargaining agreements alongside bargained-for wages and benefits and ensuring zero frontline worker layoffs and no store closures as a result of the merger. The only parties that will benefit if this deal is blocked will be the large, non-unionized retailers like Walmart, Amazona and Costco who will continue to fight unions while increasing their grocery dominance.”