A US federal judge has imposed a temporary injunction on the proposed $24.6bn merger between grocery retailers Kroger and Albertsons, citing concerns over reduced competition in the grocery market.
US District Court judge Adrienne Nelson delivered the ruling on Tuesday 10 December 2024 following a comprehensive three-week hearing in Portland, Oregon.
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The court’s decision aligns with the position of the Federal Trade Commission (FTC), which contended that the merger would contravene antitrust regulations.
The merger would have been the largest supermarket consolidation in US history.
The FTC opposed the deal in partnership with a bipartisan coalition of nine state attorneys general from Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, Washington DC and Wyoming.
The FTC welcomed the court’s decision. Bureau of Competition director Henry Liu said: “The FTC, along with our state partners, scored a major victory for the American people, successfully blocking Kroger’s acquisition of Albertsons.
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By GlobalData“This historic win protects millions of Americans across the country from higher prices for essential groceries — from milk to bread to eggs — ultimately allowing consumers to keep more money in their pockets. This victory has a direct, tangible impact on the lives of millions of Americans who shop at Kroger or Albertsons-owned grocery stores for their everyday needs, whether that’s a Fry’s in Arizona, a Vons in Southern California or a Jewel-Osco in Illinois.
“This is also a victory for thousands of hardworking union employees, protecting their hard-earned paychecks by ensuring Kroger and Albertsons continue to compete for workers through higher wages, better benefits and improved working conditions.”
Kroger and Albertsons have both publicly voiced their discontent with the outcome.
Albertsons released a statement expressing its disappointment and emphasised its belief that the merger would foster competitive pricing, improve customer service, secure union jobs and result in higher wages for associates.
The company is considering its next steps in light of the court’s detailed opinion.
Kroger’s spokesperson mirrored this sentiment of frustration and indicated that the company is considering its available alternatives.
While an appeal remains a possibility, the duration of the appellate process could potentially lead to the dissolution of the deal.
In 2022, Kroger and Albertsons proposed what would have been an historic consolidation in the US grocery sector.
They argued that their merger would enable them to compete with dominant players such as Walmart, Costco and Amazon more effectively.
Kroger operates a network of 2,700 stores across 35 states and the District of Columbia, while Albertsons operates 2,269 stores across 34 states and the District of Columbia.
In August 2024, Kroger initiated legal action against the FTC, claiming that the agency’s internal judicial process challenging Kroger’s proposed merger with Albertsons is unconstitutional.
