Kroger Pushes Back Against FTC’s Request for Preliminary Injunction
The Federal Trade Commission (FTC) has made a motion for a preliminary injunction against the proposed $24.6 billion merger of The Kroger Co. and Albertsons Cos., seeking “extraordinary relief” to stop the companies from proceeding with their planned tie-up. According to Kroger, however, the FTC has failed to satisfy its burden to show that an injunction is permissible or warranted.
A Kroger spokesperson explained to Progressive Grocer that the government’s motion for the preliminary injunction, filed last week, fails to meet the threshold requirements under the Clayton Act, a U.S. law that aims to promote fair competition and business practices. In a response to the FTC’s challenge, Kroger stated that it must “expand, adapt, and most importantly, continue to lower prices to compete with global behemoths. Simply put, modern competition for groceries and ‘household goods’ extends far beyond Kroger and Albertsons, and Kroger must embrace this reality to compete effectively and offer consumers the lowest possible prices, while offering better paid jobs to union workers.”
Kroger goes on to point out the competition posed to it by non-traditional grocers including Walmart, Costco and Amazon, which it says the FTC is not taking into account.
“The government ignores this industry reality in their case, meaning they have not properly defined a cognizable market to assess competition or to show market concentration,” Kroger explained in its response to the FTC. “Without satisfying these, they fail to meet the fundamental elements to prove an antitrust claim under the Clayton Act.”
Meanwhile, a number of lawmakers have signed on to an amicus brief that urges the Federal District Court for the District of Oregon to grant the FTC’s preliminary injunction request. U.S. Senator Ron Wyden (D-Ore.) said the merger “combines the two largest pharmacies and supermarket operators in the state of Oregon. It would give just one company control of more than 30% of Oregon's pharmacies and more than half of our grocery sales in Portland.”
“Kroger and Albertsons runs the risk of driving up grocery prices for Oregonians and making it much harder for Oregonians to find a pharmacy,” Wyden continued.
Meanwhile, a preliminary injunction against the merger was granted by Denver District Court Judge Andrew J. Luxen during a hearing on July 25 in regard to a separate lawsuit filed by Colorado Attorney General Phil Weiser.
A two-week trial on the matter is set to begin on Sept. 30, and a Kroger spokesperson told Progressive Grocer that the decision was welcome news since it eliminated the need for a preliminary injunction hearing, which had been originally slated for Aug. 12.
“We look forward to defending in court how the combination of Kroger and Albertsons will provide meaningful, measurable benefits, including lower prices and more choices for families across the country and more opportunities for stable, well-paying union jobs,” said the spokesperson.
On July 9, Kroger released a list of the stores, distribution centers and plant locations that it plans to divest to C&S Wholesale Grocers should the merger be completed. Some 579 Kroger and Albertsons stores, as well as other assets, will be divested as part of the plan.
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.
