Kroger-Albertsons merger: Why the FTC says it will raise food prices

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between grocery giants Albertsons and Kroger, both the agency and the companies have competing statements about what exactly will happen to prices should the merger go through.

Meanwhile, Ferguson and Colorado Attorney General Phil Weiser, both Democrats, have independently sued to block the merger. The judge in the Colorado case temporarily blocked the merger in July until that lawsuit, which went to trial this week, is resolved. “All existing collective bargaining agreements will continue, and associates will continue to receive industry-leading health care and pension benefits alongside bargained-for wages,” aIn his opening statement in the trial, Matthew Wolf, a lawyer for Kroger, said the increase in popularity of big-box retailers for grocery shopping needs has created complications in the traditional grocery market. Walmart accounts for around 22% of grocery sales in the country.

“In the grocery market, it’s really hard to tell what prices are going to be in two months because there are so many variables that go into grocery pricing,” Donald Polden, a law professor and former dean at Santa Clara University, told theUncontrollable events such as droughts and poor crop seasons can affect prices. The costs of ingredients, worker wages, and management efficiency at the store and corporate level also play a role.

“This supermarket mega merger comes as American consumers have seen the cost of groceries rise steadily over the past few years,” Henry Liu, director of the FTC’s Bureau of Competition,in a statement in February. “Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today.

 

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