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Calls grow for federal scrutiny of Kroger-Albertsons merger

Updated December 20, 2023 - 9:54 am

Sen. Jacky Rosen, D-Nev., called on the Federal Trade Commission on Tuesday to investigate the proposed merger between grocery store giants Kroger and Albertsons.

The two companies, which use the Smith’s, Albertsons, Vons and Safeway brands in Nevada, announced the $24.6 billion merger agreement in October 2022. They have said they want to close the deal by early 2024.

But Rosen said the FTC should investigate the merger’s possible impact on food prices. She noted that federal government estimates show that year-over-year inflation for “food at home” peaked at 13.5 percent in August 2022.

“While inflation is slowing down in 2023, that does not mean that prices are going down, but merely that they are not going up as quickly as last year,” she wrote in a letter to FTC Chair Lina Khan. “Nevadans cannot afford to get hit with even higher grocery prices as a result of this merger.”

Kroger operates 46 Smith’s grocery stores across 12 cities in Nevada, according to Rosen’s letter. The state has 35 Albertsons locations, plus seven Safeway stores and nine Vons locations.

Company officials proposed the merger in October 2022 as a way to streamline the Kroger food system and expand its footprint to areas where its brands don’t currently operate. And they point to increased competition between traditional supermarkets and online and super-retailers that now sell groceries, like Amazon and Walmart, and discount grocers like Aldi and dollar stores.

Fifteen Albertsons are expected to be sold off to C&S Wholesale Grocers as part of a divestiture plan in the proposed merger. The local stores, which have not yet been publicly identified, are part of a plan to sell off 413 stores nationwide for $1.9 billion.

“Kroger’s merger with Albertsons will mean lower prices and more choices for fresh food for customers and more investments in our communities,” a company spokesperson said in a statement. “C&S is critical to bringing these meaningful and measurable benefits to America’s consumers through their commitments to zero frontline worker layoffs and zero store closures as a result of the merger. If the merger is blocked, the non-union retailers like Walmart and Amazon will become even more powerful and unaccountable – and that’s bad for everyone.”

But Rosen said in her letter that the divestiture plan may not be enough.

“While I appreciate that the two companies have agreed to sell fifteen Albertsons stores in Nevada in order to address antitrust concerns, this does little to assuage concerns that the merger’s resulting mega-chain will be able to raise prices on Nevadans throughout the state,” Rosen wrote.

Rosen joins other Nevada officials in taking a harder look at the proposed merger. Attorney General Aaron Ford held several public listening sessions this summer and fall about how the state should approach the merger, including three that Khan attended on Sept. 13.

The FTC has until Jan. 17 to decide on the deal — including whether to sue to block it or force divestitures — according to a class-action lawsuit brought by consumers opposed to the deal, Bloomberg reported.

McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at mross@reviewjournal.com. Follow @mckenna_ross_ on X.

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