Colorado Attorney General Phil Weiser said Wednesday that he is filing a lawsuit seeking to block the $24.6 billion merger of Kroger and Albertsons, the state’s largest grocery store chains, because he believes it would eliminate competition and harm shoppers, workers and suppliers.
Weiser joins Bob Ferguson, attorney general for Washington state, who filed a lawsuit in January that said the consolidation of the two large supermarkets would severely limit options for shoppers and eliminate competition that helps keep prices in check.
Kroger owns 148 stores in Colorado, which operate under the King Soopers and City Market banners. Albertsons operates 105 Safeway and Albertsons stores in the state.
The Federal Trade Commission is reviewing the proposed merger, first announced in October 2022. The FTC is investigating whether combining Kroger, the nation’s second-largest supermarket, with Albertsons, the fourth-largest supermarket, would violate antitrust laws.
Kroger and Albertsons executives have said the merger will allow them to strengthen their stores, invest in employees and lower prices and compete against national discount grocers such as Walmart and Costco, which have grown considerably over the past two decades.
United Food and Commercial Workers Local 7, which represents workers at the two chains in Colorado and Wyoming, and other union chapters across the country oppose the merger. Weiser held listening sessions across the state in 2023 and received more than 6,000 responses to an online survey as he considered the potential impacts on Colorado shoppers, grocery employees and communities.
“After 19 town halls across the state, I am convinced that Coloradans think this merger between the two supermarket chains would lead to stores closing, higher prices, fewer jobs, worse customer service, and less resilient supply chains,” Weiser said in a statement.
The state is also suing Kroger and Albertsons over a “no-poach agreement,” Weiser said. Emails between executives showed that Albertsons agreed not to hire any King Soopers employees nor solicit any King Soopers pharmacy customers during a 2022 strike against King Soopers, Weiser said.
Such agreements are illegal under the Colorado State Antitrust Act, the attorney general said. The lawsuit against the merger seeks $1 million in civil penalties from Kroger and Albertsons each for entering into the agreement.
Weiser was also critical of a divestiture plan by Kroger and Albertsons that is aimed at alleviating the impacts of consolidation in the market. The companies have proposed selling some of their stores nationwide to C&S Wholesale Grocers for $1.9 billion to spur competition.
Union officials have said 52 of the stores to be sold to C&S are in Colorado and Wyoming. Union members fear a repeat of Albertsons’ acquisition of Safeway stores in 2015, when Haggen, a small supermarket chain based in Washington state, bought some of the stores. In less than a year, Haggen filed for bankruptcy.
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