Colorado’s Lawsuit Against Kroger-Albertsons Merger to Be Heard in August
August will be a busy month for The Kroger Co. and Albertsons Cos. Denver District Court Judge Andrew Luxen has set a date of Aug. 12 to begin hearing arguments in the State of Colorado’s lawsuit to halt the merger between the two grocery companies.
In February, following a yearlong investigation, Colorado Attorney General Phil Weiser filed a lawsuit in Denver District Court to block the merger. According to the lawsuit, the merger would eliminate head-to-head competition between Kroger and Albertsons and consolidate an already concentrated market.
Kroger operates more than 140 King Soopers and City Market stores, while Albertsons runs 100-plus Safeway and Albertsons stores in the state.
“Coloradans are concerned about undue consolidation and its harmful impacts on consumers, workers and suppliers,” said Weiser. “After 19 town halls across the state, I am convinced that Coloradans think this merger between the two supermarket chains would lead to stores closing, higher prices, fewer jobs, worse customer service and less resilient supply chains.”
Weiser also claims that Kroger and Albertsons’ divestiture proposal with C&S Wholesale Grocers is inadequate because it wouldn’t alleviate the anticompetitive effects of the merger. Weiser claims that C&S has insufficient retail grocery experience to take on a divestiture of this size, there aren't enough stores to allow C&S to effectively compete with Kroger post-merger the way that Albertsons does today, and a transition agreement makes C&S reliant on Kroger for up to two years for pricing, pharmacy, promotions, loyalty programs and IT infrastructure, diminishing competition between the companies.
A hearing date of Aug. 26 was set by Judge Adrienne Nelson of the U.S. District Court for the District of Oregon regarding the FTC’s request for a preliminary injunction against the merger. The August hearing date will come exactly six months after the FTC filed suit to halt the merger and divestiture plan, claiming that the move "falls far short of mitigating the lost competition between Kroger and Albertsons" and would increase grocery prices for millions of Americans.
During Kroger’s Q4 and fiscal year 2023 earnings call on March 7, CEO Rodney McMullen said the company is “committed to defending the merger and litigation, because we believe this is the best outcome for America's families.” McMullen also noted the merger can't close while these legal actions are pending.
Nearly half a million associates of Cincinnati-based Kroger serve more than 11 million customers daily through a digital shopping experience and retail food stores under a variety of banner names. The company is No. 4 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. Boise, Idaho based Albertsons operates 2,200-plus retail food and drug stores with 1,726 pharmacies, 401 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. It's No. 9 on The PG 100. Keene, N.H.-based C&S services customers of all sizes, supplying more than 7,500 independent supermarkets, chain stores, military bases and institutions with 100,000-plus products, in addition to operating corporate stores. The company is No. 17 on The PG 100.
