The Federal Trade Commission and 9 states want to stop the deal that would combine the country’s two largest grocery store chains. The companies say they have to merge to compete with Walmart.
U.S. regulators and nine state attorneys general are suing to stop the $24.6 billion merger of Kroger and Albertsons, the country’s two largest supermarket chains.
The companies have presented the deal as existential to surviving in the grocery business today. But the lawsuit, filed in federal court in Oregon on Monday, says it’s anticompetitive.
The Federal Trade Commission argues that Kroger’s purchase of its biggest grocery-store rival would form a colossus that would lead to higher prices, lower-quality products and services, and “eliminate fierce competition” for both shoppers and workers.
The companies have argued that together they could better face stiffening competition from Amazon, Walmart, Costco and even dollar stores. In fact, Kroger on Monday argued the FTC’s rejection of the merger would lead to higher food prices and fewer grocery stores.
“This decision only strengthens larger, non-unionized retailers like Walmart, Costco and Amazon by allowing them to further increase their overwhelming and growing dominance of the grocery industry,” a Kroger spokesperson said in a statement.
Kroger and Albertsons had cushioned their pitch to regulators with a plan to sell off up to 650 stores in areas of the country where they overlap.
