Kroger, Albertsons defend merger plan in federal court against US regulators’ objections

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In the three-week hearing that opened Monday, the FTC is seeking a preliminary injunction that would block the merger while its complaint goes before an in-house administrative law judge.

Kroger and Albertsons were back in federal court, telling a judge they may have layoffs and close stores if its planned merger isn't completed.PORTLAND, Oregon - Supermarket chain Albertsons told a federal judge Monday that it might have to lay off workers, close stores and even exit some markets if its planned merger with Kroger isn’t allowed to proceed.

Musser said Kroger and Albertsons currently compete in 22 states, closely matching each other on price, quality, private label products and services like store pickup. Shoppers benefit from that competition, she said, and will lose those benefits if the merger is allowed to proceed. The two sides also disagree on Kroger and Albertsons’ plan to sell 579 stores in places where their stores overlap. The buyer would be C&S Wholesale Grocers, a New Hampshire-based supplier to independent supermarkets that also owns the Grand Union and Piggly Wiggly store brands.

The commission also alleges that workers’ wages and benefits would decline if Kroger and Albertsons no longer compete with each other. The labor union also expressed concern that potential store closures could create so-called food and pharmacy “deserts” for consumers. U.S. District Judge Adrienne Nelson is expected to hear from around 40 witnesses, including the CEOs of Kroger and Albertsons, before deciding whether to issue the preliminary injunction. If she does decide to temporarily block the merger, the FTC’s in-house hearings are scheduled to begin Oct. 1.

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