'Kroger needs to run the table': Grocer faces third legal challenge to Albertsons merger

For the third time in just over a month, Kroger on Monday will face off with regulators over its embattled proposed merger with Albertsons – this time against Colorado Attorney General Phil Weiser's office in a state lawsuit being tried in Denver District Court .

Presided over by Judge Andrew Luxen , the trial is expected to last three weeks, Weiser said in a Thursday media briefing . The trial overlaps with a similar state trial in Washington regarding the merger that began on Sept. 16. It also begins nearly two weeks after a critical hearing over the merger in U.S. District Court in Portland, Oregon wrapped up, which is being deliberated by a federal judge .

The merger faces a legal gauntlet

Antitrust experts say many of the arguments in the cases are similar, but together they represent a steep legal threat to the deal.

“Kroger needs to run the table to close the deal: If they’re blocked anywhere it’s hard to see how the rest of the transaction can be completed,” Douglas Ross, an antitrust law professor at the University of Washington , said.

While the Federal Trade Commission is seeking to kill the deal, both Attorneys General Weiser and Bob Ferguson of Washington also indicated they were seeking court orders that could jeopardize the merger.

State challenges could have 'national implications'

During his briefing, Weiser noted preventing the chains merging in Colorado wouldn’t be enough, since the stores are supplied from some out-of-state distribution facilities and Colorado customers depend on national house brands that are part of the transaction. He said a court order could reach outside the “state’s borders.”

Similarly, Ferguson told The Enquirer last week that Kroger and Albertsons had structured their deal as an “all-or-nothing” transaction and that a court order in Washington could have “national implications.”

Christine Bartholomew, a law professor at the University at Buffalo , agreed:

“From what the companies have shared publicly, the deal is designed as a national merger - It does not allow for state specific carve outs,” she said.

The Kroger Albertsons deal and controversy

First announced in October 2022, Cincinnati-based Kroger wants to buy all outstanding shares of Boise, Idaho-based Albertsons, adding most of its employees and stores to its supermarket operation. To reassure concerns about maintaining competition, Kroger has agreed to sell 579 stores to C&S Wholesale Grocers , a grocery supplier that also operates about two dozen retail supermarkets, including Piggly Wiggly.

Upon completion, Kroger would operate more than 4,400 supermarkets (up from 2,700) generating about $208 billion in annual sales (compared to $150 billion before). If approved, Kroger would employ about 640,000 workers (up from about 414,000 currently), which could make it one of the 10 largest private employers in the world.

But regulators at both federal and state levels have expressed deep concerns. They are worried C&S Wholesale Grocers' limited experience as a retailer will prevent it from being a strong competitor and that could lead to higher prices for consumers. They are also worried about the job security of the 60,000 workers that could be moved to C&S Wholesale Grocers.

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This article originally appeared on Cincinnati Enquirer: 'Kroger needs to run the table': Grocer faces third legal challenge to Albertsons merger