Oregon and Washington Judges Halt Kroger-Albertsons Supermarket Merger

Judges in Oregon and Washington issued significant rulings on Tuesday, effectively blocking the proposed $24.6 billion merger between grocery giants Kroger and Albertsons. U.S. District Court Judge Adrienne Nelson’s 71-page decision cited concerns over increased market concentration and diminished competition, indicating potential harm to consumers. Her ruling provides a temporary halt to the merger as the Federal Trade Commission (FTC) continues its review.

In a parallel development, King County Superior Court Judge Marshall Ferguson declared in Seattle that the merger violates state antitrust laws, further complicating Kroger and Albertsons’ plans. A separate lawsuit is currently underway in Colorado, adding to the legal challenges facing the proposed merger.

The FTC has been actively pursuing this case since February, arguing that the merger would lead to reduced competition, increased costs, and lower-quality products. FTC Bureau of Competition Director Henry Liu emphasized that these rulings protect American consumers from inflated grocery prices. “This historic win protects millions of Americans… ultimately allowing consumers to keep more money in their pockets,” Liu stated.

Kroger operates approximately 2,700 stores across 35 states, employing around 430,000 people. Its various store brands include Fred Meyer and Fry’s. Albertsons, the second-largest grocery chain, has merged with Safeway and operates nearly 2,270 stores nationwide, employing approximately 285,000 people.

The opposition argued that the merger’s impact would be particularly harmful. Unlike gourmet stores or limited-assortment retailers, Kroger and Albertsons cater to a wide variety of grocery needs. Data in court suggested that sales at Albertsons locations decline significantly when Kroger stores open nearby, underscoring the competitive dynamics between these two entities.

Kroger and Albertsons countered by pointing to competition from other retailers like Amazon and Walmart. However, Judge Nelson contended that this does not necessarily imply that they serve interchangeable needs. “A monthly trip to Costco does not replace the weekly grocery shopping needs,” she wrote.

Oregon Attorney General Ellen Rosenblum remarked that Nelson’s ruling confirmed the state’s stance that the merger would negatively affect both consumers and workers during challenging economic times. States including Arizona, California, and the District of Columbia joined Oregon in the lawsuit against the merger.

Arizona Attorney General Kris Mayes highlighted the significance of the decision, stating it ensures continued access to affordable grocery options for families. “Had this merger gone forward, it could have harmed families by reducing choices, driving up prices, and eliminating jobs,” Mayes said.

In response to the rulings, Kroger and Albertsons expressed disappointment and are currently reviewing their options. A statement from Kroger emphasized the company’s commitment to lowering prices and enhancing customer service, suggesting that the merger would have benefited consumers.

Washington Attorney General Bob Ferguson praised the decision in his state, labeling it a victory for consumers and workers. He reiterated that the court’s move was crucial in keeping grocery prices down amidst economic challenges.