Senators Call for Antitrust Panel to Evaluate Kroger-Albertsons Merger
The proposed $25 billion Kroger-Albertsons merger is already running into significant opposition from progressive lawmakers and others, according to CNN. A Senate antitrust panel will hold a hearing next month on the Kroger-Albertsons merger focused on how the deal could impact competition in the grocery industry. This comes after several senators raised concerns and called on the Federal Trade Commission (FTC) to block the deal, including Sen. Elizabeth Warren of Massachusetts; Sen. Bernie Sanders of Vermont; Sen. Amy Klobuchar of Minnesota; Sen. Mike Lee of Utah; Sen. Cory Booker of New Jersey; and Sen. Richard Blumenthal of Connecticut.
Kroger's acquisition of Albertsons, which the companies expect to complete in 2024, would combine two of the largest grocers in the United States. To satisfy regulators, Kroger and Albertsons plan to form an Albertsons subsidiary dubbed SpinCo that would be spun off to Albertsons shareholders just before closing of the transaction and operate as a stand-alone public company.
Total Retail's Take: It's not surprising that this proposed merger of two giants in the grocery sector is raising antitrust concerns. The deal would reflect a further consolidation of America’s supermarket industry. “More mergers and less competition would mean even higher prices — and layoffs for employees,” Sen. Warren said on Twitter, whose concerns who were echoed by many.
Rodney McMullen, Kroger chairman and CEO, said in a press release the merger will bring together "two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders. This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors."
Kroger and Albertsons were prepared for the deal to land under a microscope, including potential divestiture plans in its announcement of the acquisition. However, Albertsons' divestitures as a remedy for antitrust concerns haven't been successful in the past. In 2015, Albertsons merged with Safeway and sold off 146 stores to Haggen, a smaller chain, to appease regulators. But Haggen struggled to integrate the Safeway stores and spiraled into bankruptcy. Albertsons then bought back dozens of the same stores it had previously sold to Haggen in bankruptcy court. That failed move was noticed by FTC Chair Lina Khan, who is likely to be more wary of the grocery retailer's spinoff plans this time around, according to CNN. The retail industry will surely be watching the Kroger-Albertsons antitrust proceedings carefully in the coming weeks, in anticipation of a huge shakeup in the grocery sector.
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.
