A federal judge in Portland, Oregon on Tuesday blocked the proposed merger between the Kroger and Albertsons supermarket chains, an operation valued at $24.6 billion and that would be the most valuable of its kind undertaken in the history of the country.
The order issued by Judge Adrienne Nelson supports the position of the Federal Trade Commission (FTC) that considers that with the acquisition of Albertsons by Kroger, until now rivals in that same segment, there is a risk of weakening competition in the supermarket sector, which would affect consumers.
The ruling, which came nearly three months after a hearing that featured testimony from top executives and economic experts, leaves the merger in limbo as the companies defend the legality of their deal.
Kroger and Albertsons employ mostly union workers and said back in 2022 that they wanted to merge to be more competitive against non-union giants like Walmart, Amazon and Costco.
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However, Nelson rejected that argument in his ruling and said that these supermarkets are “different from other grocery retailers” – such as Kroger or Albertsons -, so they “are not direct competitors of Walmart, Amazon and other companies” that sell a wider range of products.
The FTC lawsuit – which was joined at the time by the states of Oregon, Arizona, California, Illinois, Maryland, Nevada, New Mexico, Wyoming and the District of Columbia – also stressed that the merger would harm bargaining power. of the unionized workers themselves.
For their part, Kroger and Albertsons have stated during the process that if the situation is unblocked, they will commit to reducing prices by a total of one billion dollars accumulated in their products and that they will respect the unionization efforts of their employees.
Both companies had also agreed to sell about 600 stores to wholesaler C&S Wholesale Grocers to help the operation pass antitrust standards under regulatory scrutiny.
The merger proposal was first announced in October 2022 and its divestment plans were revealed in September 2023.
The situation reflects the tensions that have characterized the relationship between large corporations and the administration of the outgoing president of the United States, Joe Biden, who has opted during his mandate for antitrust laws to contain possible price increases that could affect consumer sentiment. .
With information from EFE
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