On Monday, the Federal Trade Commission sued to block a proposed merger between Kroger and Albertsons, two of the largest grocery giants in the country. They say the $24.6 million deal will dilute competition and lead to higher prices for millions.
The FTC filed the lawsuit in the United States District Court in Oregon and was joined by the attorney general of eight states and Washington, DC.
The pair agreed to a merger in October 2022, positing that said merger would help them compete against Walmart, Amazon, and Costco, as well as other rivals.
Kroger and Albertsons would control 13% of the U.S. grocery market if allowed to merge. Walmart currently controls around 22% of the market.
Kroger operates 2,750 stores in 35 states and the District of Columbia, while Albertsons operates 2,273 stores in 34 states. The companies combined employ over 700,000 people.
The merger announcement came at a time of high food prices in the aftermath of COVID-19. Typically, prices for foods eaten at home rise at 2.5% a year but jumped 11.4% in 2022 and rose another 5% last year, according to the Associated Press.
"Kroger's acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today," Henry Liu, the FTC's Bureau of Competition director, said in a statement.
According to the FTC, the deal would be the largest merger in U.S. history and would also eliminate competition for higher wages, better benefits, and better working conditions.
The action undertaken by the FTC and the states that joined allows Washington and Colorado to block the merger. The states that joined the FTC lawsuit Monday are Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming.
Kroger has promised to invest $500 million to lower prices as soon as the deal closes, in addition to promising to invest $1.3 billion in in-store improvements at Albertsons.
