The proposed merger between grocery giants Kroger and Albertsons faces regulatory scrutiny.
On Monday, the FTC led a federal lawsuit alleging that the $24.6 billion acquisition would harm millions of American consumers and supermarket workers.
The FTC said the lack of competition could lead to higher prices and lower quality products, as well as restrict grocery options for shoppers. Workers at Kroger-owned Ralphs, Albertsons-owned Vons and Safeway stores would also be threatened, with less of an ability to negotiate better wages and benefits.
The companies said the proposed deal -- the largest supermarket merger in American history -- is essential for Kroger and Albertsons to continue to compete with Walmart, Amazon and other retail chains.
For low-income communities in Southern California where only Kroger- or Alberstons-owned stores are available, the proposed deal is especially concerning.
Since the pandemic, the price of groceries has skyrocketed. From 2019 to 2023, food costs rose by 25% according to U.S. Department of Agriculture.
Michael Josephson, a Southwestern law school student, said the FTC’s lawsuit is essential to protect consumers.
Josephson: In Southern California, we lock diverse markets -- you have Trader Joe’s, you have the Kroger brands, and you have Safeway, Albertson’s brand. Realistically speaking, out of those main market competitors, prices aren’t low enough as it is. And, we’re seeing major increases in inflation.
Josephson said the government should do more to block mergers like Kroger-Albertsons from occurring.
Josephson: Realistically speaking, I don’t think those two companies should be merging. I do think that having fair competition is what drives prices down, especially since both companies are already quite expensive.
Samuel Escue, a fifth year computer science student at USC, relies on Kroger brands like Ralphs to obtain affordable groceries near campus.
Escue: Because my family shopped there for a while, we have like a Ralph’s card. And so being able to get some of the discount deals and other things enables it to work out pretty well in terms of pricing.
Now, Escue’s ability to receive some of those benefits may be more difficult.
The FTC’s lawsuit will next go to a hearing before a judge.
For Annenberg Media, I’m Yana Savitsky.