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Kroger Loses Bid to Dismiss Colorado Lawsuit Against Albertsons Merger

CEO Rodney McMullen has said grocer is “prepared to defend” the move
Emily Crowe, Progressive Grocer
Avon - Circa October 2022: Kroger Supermarket. Kroger is one of the largest grocery store chains in the United States.; Shutterstock ID 2215148747
Kroger will defend itself in court against the state of Colorado beginning in August.

A bid by The Kroger Co. to dismiss a lawsuit in the state of Colorado seeking to halt its $24.6 billion merger with Albertsons Cos. has been denied. The court there believes that since Kroger does business in the state, it is responsible for upholding its monopoly laws.

For its part, Kroger argued that Colorado’s case against it is redundant because it is already facing a similar lawsuit at the federal level. The court, however, disagreed, saying that dismissing the case "would be at odds with numerous rulings recognizing states as co-equal antitrust enforcers.”

In February, Colorado Attorney General Phil Weiser filed the 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. At the end of March, Denver District Court Judge Andrew Luxen set a date of Aug. 12 to begin hearing arguments in the Colorado lawsuit.

“Coloradans are concerned about undue consolidation and its harmful impacts on consumers, workers and suppliers,” said Weiser at the time. “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 claimed 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 said 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.

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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. 

Kroger remains committed to the merger and is ready to defend itself in court. “We are prepared to defend our merger because it will produce meaningful and measurable benefits for customers, for associates, and for communities across the country,” said Kroger CEO Rodney McMullen during the company’s Q1 earnings call. “Customers will benefit from lower prices and more choices following the merger close.”

Cincinnati-based Kroger is No. 4 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. View company website. Boise, Idaho-based Albertsons is No. 9 on The PG 100. View company website. PG also named Kroger and Albertsons among the Retailers of the Century. Keene, N.H.-based C&S is No. 18 on PG’s list. 

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