Judge Puts Brakes on Kroger-Albertson's Merger

A Colorado judge has temporarily halted a proposed $24.6 billion merger between the two largest U.S. supermarket chains. This decision came ahead of an antitrust trial set in September.

In February, Colorado Attorney General Phil Weiser sued to block the merger of Kroger, operating as King Soopers and City Market in Colorado, and Albertsons, which runs Safeway stores. Weiser argues that the merger would violate state antitrust laws and negatively impact consumers, workers, and suppliers.

The Federal Trade Commission and a bipartisan group of state attorneys general, including Arizona’s Kris Mayes, are also challenging the merger.

On Thursday, Denver District Court Judge Andrew Luxen granted Weiser’s request for a preliminary injunction, preventing the companies from finalizing their merger before a court decision.

“There is a reasonable probability that the State will prove its claims against Defendants at trial,” Judge Luxen noted.

Initially, hearings for the preliminary injunction were set for August 12. However, the companies agreed to the temporary injunction to conserve judicial resources. The trial will commence in the fall.

Weiser stated, “I am pleased Kroger and Albertsons agreed to halt their plans to merge until the court rules on the state’s lawsuit to block the grocery merger.” He added that this is reassuring news for shoppers, workers, farmers, and suppliers.

Kroger and Albertsons collectively operate nearly 5,000 stores nationwide. The merger has faced opposition from labor unions and consumer advocates who fear higher prices and reduced wages and bargaining power for workers.

Last month, Kroger and Albertsons proposed selling 579 stores, including 91 Safeway locations in Colorado, to C&S Wholesale Grocers. This move aims to address antitrust concerns. Critics argue that C&S, with only 23 retail locations, lacks the capacity to compete effectively with the merged entity.

Kim Cordova, President of United Food and Commercial Workers Local 7, voiced concerns about C&S’s ability to manage the newly acquired stores, labeling the company as inexperienced and financially unstable.

Weiser’s investigation into the merger also revealed alleged collusion between Kroger and Albertsons during a January 2022 strike by UCFW Local 7 workers at King Soopers stores in Colorado.

A two-week trial in the Colorado case is scheduled to begin on September 30. Attorney General Weiser stated, “My office looks forward to making the case that this merger will eliminate competition and impact food prices, jobs, and consumer choice.”