Feds Put Kroger-Albertsons Deal on Trial as 2024 Food Cost Anxiety Grows
By Jake Beardslee ·
August 26, 2024
The Biden-Harris administration's effort to combat rising grocery prices faces a critical test as the Federal Trade Commission's (FTC) challenge to the $25 billion Kroger-Albertsons merger goes to trial on Monday.
The outcome could have significant implications for both consumers and the upcoming presidential election. Phillip Pessar / Wikimedia
The FTC, led by Chair Lina Khan and supported by several Democratic-led states, argues that the merger would result in higher food costs and negatively impact unionized workers. Federal Trade Commission / Wikimedia
The trial, set to last three weeks in Portland, Oregon, is expected to delve into complex grocery and labor economics. Jack Sparrow / Pexels
While the trial itself will focus on legal and economic arguments, its political ramifications are hard to ignore.
Bill Kovacic, a former FTC chair under President George W. Bush, noted the case's potential impact on the current administration's economic policies and Vice President Kamala Harris's antitrust agenda. Tiffany & Co / Wikimedia
Kovacic stated, according to POLITICO, "If the commission prevails, Harris will almost certainly tout that as the Biden administration bringing cases that really benefit consumers." The White House / Wikimedia
The FTC plans to present evidence, including emails from grocery executives, which they claim proves the merger's anticompetitive nature.
Conversely, Kroger and Albertsons maintain that blocking the deal would harm consumers and workers. Albertsons / Wikimedia
Kroger spokesperson Erin Rolfes argued, "Contrary to the FTC's statements, blocking Kroger's merger with Albertsons Companies will actually harm the very people the FTC purports to serve: America's consumers and workers." Tysto / Wikimedia
The case has drawn attention from lawmakers on both sides of the aisle. Democratic lawmakers have expressed support for the FTC's position, while some Republican senators and state attorneys general favor the merger. Harrison Keely / Wikimedia
Central to the trial will be the effectiveness of the companies' proposed remedy to sell nearly 600 stores to C&S Wholesale Grocers.
The FTC contends this solution would be inadequate, citing past failures in similar situations. Gryffindor / Wikimedia
The trial's focus on worker impact sets it apart from typical antitrust cases.
John Newman, a law professor and former FTC official, observed, "To the extent that the Biden administration took a really clear pro-worker, pro-labor stance across the board, this is one of the clearest antitrust actions that reflects that approach." The White House / Wikimedia
As the trial begins, both sides have much at stake.
The companies have reportedly spent over $850 million on merger-related fees, according to Bloomberg, while the FTC's reputation and future role in antitrust enforcement hang in the balance. ajay_suresh / Wikimedia
The court's decision, expected in the weeks following the trial, could significantly influence the grocery industry landscape and potentially shape the narrative of the upcoming presidential election. Sora Shimazaki / Wikimedia
