Legal & Courts  December 10, 2024

Judges halt Kroger, Albertsons merger

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Judges in Oregon and Washington issued injunctions Tuesday halting, at least for the moment, a planned merger between Albertsons Cos. (NYSE: ACI) and Kroger Co. (NYSE: KR), the parent company of Colorado-based grocery chain King Soopers.

The decisions from U.S. District Court Judge Adrienne Nelson, the result of an antitrust lawsuit brought by the Federal Trade Commission, and King County (Washington) Superior Court Judge Marshall Ferguson put the $24.6 billion deal in jeopardy.

Colorado Attorney General Phil Weiser filed a similar lawsuit, and a trial was held in Denver in October. The judge in that case has yet to issue a decision.

“Today’s ruling is a victory for consumers, workers, and farmers,” Weiser said in a statement Tuesday.

The merger proposal has drawn criticism from the Federal Trade Commission and from labor leaders, including United Food & Commercial Workers Local 7, the union that represents King Soopers grocery workers across the Front Range, including in Northern Colorado and the Boulder Valley. Critics argue that consolidation would increase prices and force down worker wages. 

“It would be disastrous for shoppers who deserve competition that leads to better choices and lower prices,” UFCW Local 7 said in a statement Tuesday afternoon. “The merger would be detrimental to our communities, would harm farmers and suppliers who deserve a healthy balance to negotiate fair prices for their hard work. Instead, the proposed merger would create an out-of-balance system that drives up prices, drives out competition, and drives down wages and safety standards.”

Kroger and Albersons have argued that a merger is necessary to allow the combined organization to compete with the likes of Walmart Inc. (NYSE: WMT) and Amazon.com Inc. (Nasdaq: AMZN), both of which sell groceries.

In an statement emailed to BizWest on Tuesday afternoon, a Kroger spokesperson said: “Through its proposed merger with Albertsons, Kroger would invest more than $1 billion in lower grocery prices, invest an additional $1 billion in higher grocery worker wages, and invest an additional $1.3 billion to improve Albertsons stores. Kroger is disappointed in the opinions issued by the U.S. District Court for the District of Oregon and the Washington State Court, which overlook the substantial evidence presented at trial showing that a merger between Kroger and Albertsons would advance the company’s decades-long commitment to lowering prices, respecting collective bargaining agreements, and is in the best interests of customers, associates, and the broader competitive environment in a rapidly evolving grocery landscape. The Company is currently reviewing its options.”

To appease antitrust regulators, the would-be merger partners released a list of 579 Albertsons-owned stores in 19 states, including 91 in Colorado, that would be sold to C&S Wholesale Grocers Inc., a privately held New Hampshire company that owns several grocery-store brands such as Piggly Wiggly. The divestiture list includes nearly two dozen Boulder Valley and Northern Colorado Safeway stores.

So far, those tasked with evaluating the merits of the merger have not been appeased. 

Denver District Court Judge Andrew Luxen granted a preliminary injunction over the summer, halting the merger in Colorado until after a ruling is made following October’s trial. A decision in that case is expected soon.

“All along, we have made the case that the Kroger/Albertsons merger is illegal and bad for Colorado,” Weiser’s statement said. “It is bad for grocery shoppers who are already feeling pinched at the checkout counter. It’s bad for workers and their job security and benefits. And it’s bad for farmers and other suppliers because there would be fewer local food options available at the store.”

Judges in Oregon and Washington issued injunctions Tuesday halting, at least for the moment, a planned merger between Albertsons and Kroger.

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A Maryland native, Lucas has worked at news agencies from Wyoming to South Carolina before putting roots down in Colorado.
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