A U.S. district judge blocked what would have been the largest U.S. merger in supermarket history on Tuesday, Dec. 10. The judge agreed with the Federal Trade Commission’s argument that Kroger’s $25 billion bid to takeover Albertsons would end up hurting shoppers.
The FTC had argued eliminating the head-to-head competition between Kroger and Albertsons would be illegal, and the U.S. district judge in Oregon agreed.
An FTC spokesperson said the ruling protected “competition in the grocery market, which will prevent grocery store prices from rising more.”
During the trial, Kroger argued that the merger would decrease prices for customers, saying increased revenue from a larger operation would trickle down to shoppers. The grocery store even made a public pledge to lower prices if the merger went through.
Lawyers for Kroger also claimed the companies needed the merger to compete with global brands like Walmart and Amazon.
However, grocery worker unions didn’t buy in, and they said the merger would lead to job losses.
Meanwhile, attorney generals in 10 states also came out against the marriage of the two companies, with some joining the FTC lawsuit against the merger, and others suing the grocery store chains.
Kroger and Albertsons did not immediately respond to the ruling, but the companies could still choose to litigate the issue in a separate case and court.
While Tuesday’s ruling is a win for the Biden administration’s tough antitrust stance, a former FTC chair previously told Straight Arrow News he expects the merger landscape will be less strict under President-elect Donald Trump.
If the deal somehow makes it through, nearly 600 stores would be added under Kroger’s banner, increasing its number of stores to around 5,000 across the U.S.
