- The Biden administration argues that Kroger’s acquisition of Albertsons would drive up prices for consumers.
- Food prices have increased 25 percent during Biden’s presidency; He hopes to win the support of Americans worried about their grocery bills by blocking the deal.
US antitrust officials sued on Monday to block the proposed merger of Kroger and Albertsons, arguing that the deal would harm consumers, a decision that could affect the results of the 2024 elections in two battleground states.
The Federal Trade Commission announced that it is seeking a preliminary injunction that will block Kroger’s proposal to acquire Albertsons for $24.6 billion.
The commission said the potential merger would lead to “higher prices for food and other essential household items for millions of Americans.”
Henry Liu, director of the FTC’s competition bureau, said: “This isThe supermarket megamerger comes as American consumers see the cost of food rise steadily in recent years.
“Kroger’s acquisition of Albertsons would result in additional price increases on everyday products, further exacerbating the financial stress consumers across the country face today.”
FTC Files Lawsuit Against Proposed $26 Billion Merger Between Kroger and Albertsons
The Biden administration argues that Kroger’s acquisition of Albertsons would drive up prices, hurting consumers.
The deal was announced in October 2022, when the companies pitched the idea as a way to get a chance to compete with giant retailers like Walmart and Amazon.
Kroger rejected the commission’s arguments and said that as a company, they have had a long history of reducing costs for consumers after acquisitions.
The company has committed to spending $500 million to reduce prices after the merger is completed, as well as an additional $1.3 billion to improve Albertsons stores.
Kroger said in response to the FTC’s comments: “Contrary to the FTC’s statements, blocking Kroger’s merger with Albertsons Companies will actually harm the very people the FTC aims to serve: America’s consumers and workers. “.
Kroger added that the FTC’s actions would be harmful to workers because they would give a boost to “larger non-union retailers like Walmart, Costco and Amazon by allowing them to further increase their overwhelming and growing dominance of the grocery industry.”
On the other hand, the FTC argued that a ‘Kroger/Albertsons combination.’ …would gain greater influence over workers and their unions, to the detriment of workers.’
The FTC was joined in its action by eight states and the District of Columbia.
However, the government drama has barely impacted the stock price of either grocer.
The lawsuit, however, may have weight beyond how it affects American supermarket shoppers.
Since Joe Biden took office, food prices have increased 25 percent. He hopes that opposing the deal will convince Americans that he is trying to protect them from even higher prices.
Both Kroger and Albertsons have dozens and dozens of stores in the western parts of the country, including Nevada and Arizona, two must-win swing states that will be up for grabs in November.
The Biden administration reportedly hopes to block the merger and publicize the move as a victory for Democrats against rising food prices, a major complaint of Americans weathering the current economy.
Both Arizona and Nevada joined the FTC’s lawsuit opposing the merger. Both states have Democratic attorneys general.
“Biden is committed to reducing food costs for families using every tool at his disposal,” said Biden economic adviser Jon Donenberg.
Grocery bills in Nevada are the second highest in the country, followed by Arizona. Biden won both states in 2020 by narrow margins and is looking to repeat those results this time.
Since Joe Biden took office, food prices have increased 25 percent. Grocery bills are a top concern for everyday Americans, who will cast their votes with kitchen table issues in mind.