Senators Call On FTC To Investigate $25B Kroger-Albertsons Merger
U.S. lawmakers are calling on the Federal Trade Commission to investigate the Kroger and Albertsons merger, arguing that the merger could lead to further negative impacts on food affordability.
Sens. Amy Klobuchar, Richard Blumenthal and Cory Booker wrote a letter to the FTC this week after the country's two largest grocery chains announced their $24.6B merger, The Wall Street Journal reported. The senators said the FTC should include data regarding grocery prices and food product availability they requested last fall in their review.
"These issues are worse for families in areas without access to affordable, nutritious food," the senators wrote in their letter to the FTC. "And across the country, more than six million American children suffer from not having enough food.
"Against that backdrop, last week the nation’s two largest grocery chains, Albertsons and Kroger, announced a proposed $25 billion merger. This merger raises considerable antitrust concerns."
Antitrust authorities are likely to pay attention to the nearby locations the companies have that compete with each other, WSJ reported. These investigators have frequently examined the potential effects of major retail mergers on the local level, considering market overlaps in different regions of the country.
To help gain regulatory approvals, Kroger and Albertsons plan to divest between 100 and 375 stores into a separate entity called SpinCo, a subsidiary that would manage, sell or close these stores to get value for the real estate, Wealth Management reported. The chains have significant overlap in the mid-Atlantic, Midwest, Southwest and Pacific Northwest.
The two chains operate a total of 4,995 storefronts, 3,972 pharmacies, 2,015 fuel centers, 66 distribution centers and 52 manufacturing facilities. Together, the brands operate in 35 states and D.C.
In the 2015 Albertsons and Safeway merger, the FTC required the two companies to sell 168 supermarkets to allow smaller chains to buy the properties and create more competition. The senators now say those divestitures weren't sufficient in avoiding anti-competitive behavior, as Albertsons later bought back many of the stores the FTC had required it to sell.
