ARIZONA – Attorney General Kris Mayes, the Federal Trade Commission (FTC), and a bipartisan coalition of states, today announced the filing of a lawsuit that challenges the proposed merger of Kroger and Albertsons. These companies are the country’s two largest national supermarket chains, and this merger presents a significant risk of reduced competition and higher food prices nationwide. In Arizona, the two chains are the fourth and sixth largest employers, with a combined 35,000 employees across 250 stores. The companies also operate under Fry’s, Smith’s, and Safeway brands in Arizona.
“For the better part of last year, I traveled across the state from Prescott to Kingman and Show Low to Sierra Vista to hear from Arizonans what they thought about this proposed merger,” said Attorney General Mayes. “Many voiced concerns for potential job losses associated with combining the two companies, seniors on fixed incomes were worried that grocery prices would only go up if the merger goes through, and military families expressed fear that their insurance would not be accepted at the pharmacy of a merged company. Rural Arizonans, in particular, raised serious concerns about how a merger would exacerbate existing food deserts.”
The lawsuit seeks to block the proposed Albertsons-Kroger merger, alleging it violates the federal Clayton Act, which prohibits the acquisition of assets where the effect of such acquisitions may substantially lessen competition or create a monopoly. Businesses facing less competition have the ability to charge higher prices without providing improvements to the quality of goods.
Spokespeople for the two grocery giants contend that the merger would have a positive effect, helping them to compete against Walmart and Amazon, leading to lower prices and an increase in job opportunities for Arizonans.
“It is clear that Arizonans in rural and urban communities alike are seriously concerned about the potential for drastic changes to their daily lives if this merger goes through,” continued Mayes. “Bottom line: this merger will benefit the shareholders of these companies, not regular Arizonans. I am proud to stand with the FTC and my fellow attorneys general in suing to block this anticompetitive, anti-consumer, and anti-worker merger.”
Anticompetitive supermarket mergers can impose other harms, including a reduction in labor market competition, which may lower wages or slow wage growth, worsen benefits or working conditions, or result in other degradations of workplace quality.
