Courts in both Washington and Oregon have blocked Kroger‘s acquisition of Albertsons. The deal was signed in 2022, but now seems to be made completely impossible.
Verdict: competition at risk
In 2022, US-based supermarket chains Kroger and Albertsons announced a merger. Kroger offered 24.6 billion dollars (more than 22 billion euros) to create the second-largest supermarket group in the United States, second only to Walmart. Together, the retailers would have more than 5,000 stores and 700,000 employees in 48 states. The plan was a major setback for Ahold Delhaize, which was itself bidding for Albertsons.
However, the American antitrust authorities immediately opposed the deal. Last February, the Federal Trade Commission filed a lawsuit to block the acquisition, and about nine states followed suit. This week, courts in Washington and Oregon rejected the deal in their respective districts.
Kroger and Albertsons had proposed selling 579 stores to C&S Wholesale Grocers to address antitrust concerns, but judges in Oregon and Washington questioned C&S’s ability to act as a strong competitor, especially in states where both chains have dominant market positions. Antitrust officials fear higher consumer prices and worse working conditions.
Political and economic context
Beyond the legal implications, the case also has political dimensions. The White House hailed the ruling as a victory for consumers and small businesses. The fact that food costs have increased by 25 % since the pandemic, remains a hot topic in the US.
Both companies expressed disappointment with the rulings and are considering further legal action. In the face of Walmart and Amazon, Kroger and Albertsons are portraying themselves as defenders of traditional supermarkets. However, analysts are skeptical about the viability of the proposed merger, especially given the diminishing benefits since it was announced two years ago.
