WASHINGTON (dpa-AFX) - The Federal Trade Commission or FTC along with a
group of nine attorneys general have filed a lawsuit to block Kroger Co.'s
proposed $24.6 billion acquisition of the Albertsons Companies, Inc., alleging
that the deal is anticompetitive.

In the move, FTC alleges that the planned merger, which would be the largest
among supermarkets in U.S. history, will eliminate competition and raise grocery
prices, while harming thousands of workers.

The group of nine attorneys general joining the FTC's federal court complaint
include Arizona, California, the District of Columbia, Illinois, Maryland,
Nevada, New Mexico, Oregon, and Wyoming.

Meanwhile, Colorado Attorney General in mid February had filed a lawsuit to stop
the proposed merger, expressing concerns about potential harm to consumers. A
similar lawsuit was filed by Washington state in January.

Kroger operates thousands of stores across 36 states, and Albertsons operates
thousands of stores across 35 states. Following a merger, Kroger and Albertsons
would operate more than 5,000 stores and around 4,000 retail pharmacies. They
would employ nearly 700,000 employees across 48 states.

In the filing, the FTC alleged that the proposed merger, which was announced in
2022, will eliminate fierce competition between Kroger and Albertsons, leading
to higher prices for groceries and other essential household items as well as
lower quality products and services. It will also narrow consumers' choices for
where to shop for groceries.

Further, the proposed acquisition would immediately erase aggressive competition
for workers, and will threaten their ability to secure higher wages, better
benefits, and improved working conditions.

The agency noted that both Kroger and Albertsons executives have acknowledged
that they are direct competitors, forcing each other to aggressively compete for
customers by lowering prices and for employees by providing better pay and
benefits across the country.

According to FTC, executives for both supermarket chains have conceded that
Kroger's acquisition of Albertsons is anticompetitive, with one executive
reacting to the proposed deal: 'you are basically creating a monopoly in grocery
with the merger.'

For securing antitrust approval of their merger, Kroger and Albertsons have
proposed to divest several hundred stores and select other assets to C&S
Wholesale Grocers.

Regarding this, the FTC's administrative complaint alleged that Kroger and
Albertsons's inadequate divestiture proposal is a hodgepodge of unconnected
stores, banners, brands, and other assets that Kroger's antitrust lawyers have
cobbled together. They falls far short of mitigating the lost competition
between Kroger and Albertsons.

The FTC says the proposed divestitures are not a standalone business, and that
C&S would face significant obstacles combining the various parts and pieces from
Kroger and Albertsons into a functioning business.

Henry Liu, Director of the FTC's Bureau of Competition, said, 'This supermarket
mega merger comes as American consumers have seen the cost of groceries rise
steadily over the past few years. 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.'

The FTC said the federal court complaint and request for preliminary relief will
be filed jointly with the state attorneys general in the U.S. District Court for
the District of Oregon.



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