Kroger-Albertsons Merger Cannot Move Forward in Washington State
In the second ruling of the day to come down in regard to the proposed $24.6 billion merger between The Kroger Co. and Albertsons Cos., Washington state’s King County Superior Court Judge Marshall Ferguson ruled that the merger is unlawful and cannot go forward.
Washington State Attorney General Bob Ferguson filed the initial antitrust lawsuit on Jan. 15 to block the merger, asserting that it would severely limit shopping options for consumers and raise grocery prices in the state. Washington state was also seeking to avoid the situation it found itself in a decade ago, when Albertsons acquired the Safeway chain, which resulted in Haggen’s bankruptcy.
"In my view, the evidence convincingly shows that the current competition between Kroger and Albertsons stores is fierce in the State of Washington,” stated Judge Ferguson. “By contrast, the divestiture buyer, C&S Wholesale, with its limited retail experience, will not be able to replicate the ferocity of that competition or compete in Washington against the colossus of a merged Kroger and Albertsons."
In the Seattle courtroom, Kroger had contended that its merger with Albertsons would help the combined company compete effectively and offer customers the lowest possible prices, while providing good-paying jobs to union workers. Kroger also said that the merger would result in substantial efficiencies, including cost synergies, which would allow the company to compete for customers and associates more effectively than either can alone.
According to a Kroger spokesperson, the company is currently reviewing its options.
“Through its proposed merger with Albertsons, Kroger would invest more than $1 billion in lower grocery prices, invest an additional $1 billion in higher grocery worker wages, and invest an additional $1.3 billion to improve Albertsons stores,” the spokesperson said. “Kroger is disappointed in the opinions issued by the U.S. District Court for the District of Oregon and the Washington State Court, which overlook the substantial evidence presented at trial showing that a merger between Kroger and Albertsons would advance the company’s decades-long commitment to lowering prices, respecting collective bargaining agreements, and is in the best interests of customers, associates, and the broader competitive environment in a rapidly evolving grocery landscape.”
Earlier on Dec. 10, U.S. District Judge Adrienne Nelson granted a preliminary injunction against the merger, ruling in favor of the Federal Trade Commission (FTC) and its mission seeking “extraordinary relief” to stop the companies from proceeding with their planned tie-up.
A third merger review case in Colorado began on Sept. 30. In February, following a year-long investigation, the Colorado Attorney General Phil Weiser filed a lawsuit in Denver District Court to block the merger. According to the lawsuit, the deal would eliminate head-to-head competition between Kroger and Albertsons and consolidate an already concentrated market.
That four-week trial wrapped up on Oct. 25, with a decision is still pending.
Cincinnati-based Kroger serves more than 11 million customers daily through a digital shopping experience and retail food stores under a variety of banner names. The grocer employs 420,000 associates and is No. 4 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America.
As of June 15, Albertsons Cos. operated 2,269 retail food and drug stores with 1,725 pharmacies, 403 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. The Boise, Idaho-based company operates stores across 34 states and the District of Columbia under more than 20 well-known banners. Albertsons is No. 9 on The PG 100.
