Six US lawmakers wrote to the Federal Trade Commission (FTC) expressing their opposition to the proposed $24.6-billion (€22.8 billion) acquisition of grocery chain operator Albertsons by peer Kroger Co, according to a letter reviewed by Reuters.
Senators Elizabeth Warren, Mazie Hirono, Bernie Sanders and Cory Booker and representatives Summer Lee and Alexandria Ocasio-Cortez said in the letter that Kroger's proposal to divest 413 stores to C&S Wholesale Grocers would not address harms to consumers, workers, and the grocery industry if the merger is allowed.
The lawmakers are arguing that store divestitures as a remedy to mega mergers often fail to maintain competitive conditions, because companies have an incentive to ensure that the businesses they spin off do not succeed.
C&S, which secured financial backing from SoftBank Group Corp for its deal with Kroger, operates primarily as a supplier rather than a grocery-store operator. It currently has around two dozen stores under the Grand Union and Piggly Wiggly brands.
Support For The Deal
“Kroger’s merger with Albertsons will mean workers gain from $1 billion (€930 million) in higher wages, expanded benefits, long-term job security, and a strong unionised workforce. The merger will also mean lower prices and more choices for fresh food for customers and more investments in our communities," a Kroger spokesperson said in a statement.
Other lawmakers, including congressmen Greg Landsman, Brian Fitzpatrick and Josh Gottheimer have sent letters to the FTC in support of the deal.
“Albertsons Cos. merging with Kroger will expand competition, lower prices, protect union jobs, and enhance customers’ shopping experience,” a representative for Albertsons said in a statement.
The only parties that would benefit if the deal is blocked would be Amazon, Walmart and other large, non-union retailers, whereas a combined Kroger and Albertsons would ensure that neighbourhood supermarkets can better compete with these retailing giants, the representative continued.
The FTC declined to comment.
Kroger has said that it will not close any stores, distribution centres or manufacturing facilities or lay off any frontline associates as a result of the merger.