Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Farm, consumer groups urge U.S. to block Kroger's planned $25 billion buy of Albertsons

Published 12/01/2022, 12:11 PM
Updated 12/01/2022, 03:46 PM
© Reuters. FILE PHOTO: Traders work as screens display the trading information for Kroger Co and Albertsons Cos Inc. on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 14, 2022. REUTERS/Brendan McDermid/File Photo
WMT
-
KR
-

WASHINGTON (Reuters) -Advocacy groups, including the Open Markets Institute and National Farmers Union, on Thursday asked U.S. antitrust enforcers to stop Kroger (NYSE:KR) Co's planned $25 billion purchase of rival grocery giant Albertsons Companies Inc.

In a letter to Federal Trade Commission Chair Lina Khan, the groups argued that the deal would raise prices in some parts of the United States and hurt some grocery store and warehouse workers.

"As organizations representing farmers, workers, consumers, and advocates for fair food systems, we urge the Federal Trade Commission to block Kroger's acquisition of Albertsons," the letter said.

Kroger said in a statement that it did not expect the deal, if it goes forward, to lead to any store closures, which would hurt workers.

"With a broader network and even more customers to serve, we believe the merger will benefit our suppliers, including farmers, as it will allow for a more efficient distribution chain, provide opportunities to grow sales together and reduce waste," the company said.

Kroger Chief Executive Rodney McMullen argued this week in a congressional hearing that even after the deal, his company would remain smaller than Walmart (NYSE:WMT).

The FTC declined comment.

The groups, which include Food and Water Watch, argued that the biggest food companies pay fees to Kroger and Albertsons to ensure shelf space for their products, leaving little room for new or community-based suppliers.

"Combining Kroger and Albertsons will also create a new mega-grocery buyer with exceptional buyer power to squeeze its suppliers, shrinking farmers' and workers' share of the food dollar," the letter added.

© Reuters. FILE PHOTO: Traders work as screens display the trading information for Kroger Co and Albertsons Cos Inc. on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 14, 2022. REUTERS/Brendan McDermid/File Photo

The deal has faced skepticism from lawmakers who have expressed concern that the tie-up could raise already-high food prices. It also comes as the Biden administration takes a more aggressive approach to antitrust enforcement.

The groups also said that workers, including those at the stores, could lose jobs or bargaining clout if the deal goes forward. "Many Kroger and Albertsons store workers already struggle to meet their basic needs," they said, noting that a 2021 study of Kroger workers found that 75% had trouble buying groceries.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.