Kroger, Albertsons CEOs make the case in federal court for merger

PORTLAND, Ore. ( KOIN ) — The CEOs of Kroger and Albertsons are trying to convince a federal judge in a Portland courtroom that their potential merger would be good for their shoppers and workers.

The corporate leaders are facing off with the Federal Trade Commission, which wants to block what could be the largest supermarket merger of all time.

The CEOs said they intend to lower prices if the merger should be allowed to go through and lay the groundwork for competing with retail giants like Walmart and Costco.

Rodney McMullin is the CEO of Kroger, which owns Fred Meyer stores. He said that even if there is more inflation, combining the companies would allow them to lower prices even more than if the merger didn’t go through.

“The day that we merge is the day that we will begin lowering prices,” McMullen said .

McMullin said he comes from a union family and is a proud union employer, with 65% of their workers being in a union. He said his stores would remain unionized after the merger.

The deal would entail the sale of dozens of stores to C&S Wholesale Grocers . McMullin said he expects those stores to remain unionized.

However, the prosecutor pointed out there is no guarantee. He said while Kroger promised not to close stores at an initial merger, some stores — including those sold off — could close later through consolidation or due to lack of profitability.

Vivek Saankaran is the CEO of Albertsons, which owns Safeway Stores. He said the stores are financially sound but without selling to Kroger they would have to consider options like layoffs and store closures.

Hundreds of millions of dollars are being spent by Kroger and Albertsons on merger-related expenses. In court, it was revealed that $1 billion — a third of Kroger’s $3 billion profits last year — was spent on the merger attempt.

There are dozens of witnesses testifying in this court case that will go into next week. The judge may decide to push the pause button on the merger so a judge with the FTC can hear the case. The companies said the judge’s decision has the potential to kill the $25 billion deal.

There was a lot of discussion by lawyers and the CEOs about whether Costco, Walmart and Amazon are really competitors of Kroger and Albertsons. The CEOs said they absolutely are, arguing if someone buys in bulk through one of those companies, that’s less money spent on products at Albertsons or Fred Meyer.

Earlier this year, the FTC sued to stop the merger that was originally proposed in Oct. 2022, arguing the deal would eliminate competition and hike food prices for struggling consumers.

Worker unions in the Pacific Northwest were initially split on the idea of the merger. Last month, one union in Portland representing Kroger workers even retracted their initial endorsement of the merger . The merger and its potential negative impacts on workers was also a frequent talking point during the recent week-long strike of Fred Meyer workers that wrapped on Tuesday.

Sen. Ron Wyden (D-Ore.), the chair of the Senate Committee on Finance , has also been critical of the proposed merger .

For the latest news, weather, sports, and streaming video, head to KOIN.com.