Kroger-Albertsons Merger Faces Setbacks in Federal and State Courts

Judges in state and federal courts issued rulings on Dec. 10 blocking a proposed merger between supermarket chains Albertsons and Kroger.

Oregon District Judge Adrienne Nelson and Washington’s King County Superior Court Judge Marshall Ferguson both said the merger would have anti-competitive effects.

“As a result, the proposed merger is likely to lead to unilateral competitive effects and is presumptively unlawful.”

The companies later said they would divest more than 500 stores to C&S Wholesale Grocers.

In justifying his permanent injunction, Ferguson said that the divestiture would not restore competition lost to the merger. “The merger is likely to harm Washington consumers by eliminating this fierce head-to-head competition,” Marshall said, noting that Kroger and Albertsons are competitors.

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The companies announced their intention to merge in October of 2022, with Kroger proposing to acquire Albertsons for approximately $24.6 billion.

Nelson’s order granted a preliminary injunction requested by the Federal Trade Commission (FTC). She said that her order “leaves open the possibility that they may pursue the merger at a later date should it be deemed lawful in the administrative proceedings.”

In a statement to The Epoch Times, a Kroger spokesperson expressed disappointment with the two orders and said the company was reviewing its options.

“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,” the spokesperson said.

President Joe Biden’s administration said the merger would raise prices.

“The Kroger-Albertsons merger would have been the biggest supermarket merger in history—raising grocery prices for consumers and lowering wages for workers,” National Economic Council Deputy Director Jon Donenberg said in response to the federal court’s decision.

Washington Attorney General Bob Ferguson similarly celebrated Ferguson’s decision.

“We went to court to block this illegal merger to protect Washingtonians’ struggling with high grocery prices and the workers whose jobs were at stake,” he said in a press release. “This is an important victory for affordability, worker protections and the rule of law.”

Combined, Kroger and Albertsons operate roughly 5,000 supermarkets nationwide, Marshall said. In 2023, Kroger saw $150 billion in revenue while Albertsons saw $79.2 billion in revenue.

Emel Akan contributed to this report.