Lawyers representing Washington state are preparing to challenge the proposed merger between Albertsons and Kroger, citing concerns about the negative repercussions of previous grocery chain mergers. This legal battle is one of three lawsuits contesting the $24.6 billion deal, with the Federal Trade Commission currently engaged in a court case in Oregon, where closing arguments are imminent. Colorado has also taken legal action to block the merger.
Residents of Washington would potentially suffer the greatest impact if the merger is approved, as Albertsons and Kroger collectively operate over 300 grocery stores in the state, controlling more than half of the grocery sales there. A proposed solution to address regulators’ worries involves Kroger and Albertsons selling 579 stores, 124 of which are in Washington if the merger proceeds. The state’s attorney general’s office has raised concerns about the lack of experience of the proposed buyer, C&S Wholesale Grocers, in running stores or pharmacies.
Washington aims to avoid a situation similar to a past merger where Albertsons’ purchase of the Safeway chain led to store closures and layoffs. When Albertsons sold 146 stores to Haggen to appease regulators during that merger, Haggen ultimately struggled with the expansion, resulting in closures and job losses. Presently, ten Haggen stores in Washington are slated to be sold should the Albertsons-Kroger merger materialize.
The state’s Attorney General, Bob Ferguson, seeks to block the merger not only in Washington but nationwide, arguing that eliminating competition between Albertsons and Kroger would likely lead to higher prices, reduced quality, and potential store closures. Albertsons and Kroger maintain that the merger would enhance their competitiveness against rivals like Walmart and Costco. Despite their arguments, concerns remain among Washington residents and advocacy groups.
In a recent development, Albertsons removed a restriction on a shopping plaza in response to an investigation by Washington’s attorney general. This restriction had prevented the opening of any grocery store in the Birchwood shopping plaza for 20 years after Albertsons closed a store in the area, resulting in limited access to fresh food for the community. Although efforts are being made to address food insecurity in the region, challenges persist, and the community continues to face uncertainties regarding future access to unionized jobs and essential groceries.
As discussions and legal proceedings unfold, the impact of the proposed merger on Washington’s grocery landscape and communities remains a focal point of concern for residents and advocates. The outcome of these legal battles and regulatory decisions will have far-reaching implications for the state’s food retail sector and consumer access to essential goods.
