Kroger and Albertsons megamerger gets its day in court
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Lawyers for the FTC and Kroger on Monday gave opening arguments in an antitrust trial that could determine the future of America's grocery sector.
Why it matters: The outcome will impact food prices for millions of consumers. Both sides agree on this, although the government thinks prices would rise and Kroger believe prices would decline.
- It also could impact thousands of union jobs and a presidential campagin where grocery costs and consolidation have become central issues.
Catch up quick: Kroger agreed to buy rival Albertsons for $25 billion in October 2022, thus merging the country's second and fourth-largest grocery retailers (Walmart would remain in the top spot).
- The FTC earlier this year sued to block the deal, and is asking a U.S. district court in Oregon for a preliminary injunction while it seeks an administrative court hearing.
Zoom in: Opening arguments suggested that the case could hinge, in part, on which retailers are considered key competitors to Kroger and Albertsons, Axios Pro reported.
- The FTC went narrow, including Walmart, Target and traditional supermarket chains.
- Kroger went broader, adding Costco and nontraditional food retailers like dollar stores and pharmacies.
The intrigue: The defense also explicitly warned that an FTC victory wouldn't pull Albertsons off the auction block.
- Albertsons attorney Enu Mainigi said of such a potential ruling: "It could mean layoffs, it could include closing stores, it may include exiting certain markets altogether. And if somehow Albertsons does not succeed at those kinds of measures, the likelihood is it is a candidate for a sale to somebody else."
- Hard to imagine Walmart or Target making a play, given antitrust pressures, but Ahold Delhaize or even Publix could kick tires.
The bottom line: This may be the Biden/Harris administration's last major antitrust case to reach resolution before November's election.
