Kroger-Albertsons merger will increase costs for shoppers, says FTC chair

The chairperson of the US’s Federal Trade Commission has warned that the largest-ever planned grocery merger would increase costs for everyday shoppers despite promises to the contrary by those at the center of the $24.6bn deal.

Lina Khan made the remarks on Sunday on CBS’s 60 Minutes while discussing plans for Kroger and Albertsons to merge, something that the FTC is seeking to block.

“If the company’s not checked by competition, it won’t have an incentive to pass those benefits on to the consumer,” Khan told the 60 Minutes correspondent Lesley Stahl. “Because those consumers may not have anywhere else to go.”

A trial over whether the Kroger-Albertsons merger should proceed concluded on Tuesday in Portland, Oregon, with attorneys for the grocery chains arguing that efficiencies built into the deal would give them a fighting chance to provide a more affordable alternative to consumers in the face of competition from retail giants like Walmart, Costco and Amazon.

But the FTC’s lawyers contended that Kroger and Albertsons were actually more in direct competition with each other than with Amazon or Costco, where shoppers buy other kinds of products. And affirming the proposed deal would ultimately eliminate broader competition and saddle customers with higher food prices, the FTC maintained.

It has not been immediately clear when the federal judge who heard the case, Adrienne Nelson, may issue a final ruling. The grocery chains and the FTC each have until Friday to submit their final written arguments, as Axios reported.

In the interim, Khan went on 60 Minutes and was shown embarking on what she described as a grocery prices listening tour. One shopper shown on the popular news magazine program described getting “sticker shock” on each trip to the supermarket because “groceries are so expensive now”.

Stahl, in her conversation with Khan, cited economists’ conclusions that those high prices stemmed from supply chain problems caused by the Covid-19 pandemic as well as Russia’s invasion of Ukraine rather than monopolies.

Khan said: “There’s no doubt that the pandemic and the war led prices to soar.” But, she added, “what’s been interesting is that even as some of those supply chain pressures have eased, prices have not come down concurrently as much”.

Asked whether she was saying certain “monopolies are deliberately hiking the prices”, Khan replied: “So there’s a lot of discussion about what’s driving the inflation and we’ve actually seen some executives boast on earnings calls about how inflation is great for their bottom line …

“They have said that publicly.”

A Kroger spokesperson issued a statement Monday reiterating that the chain was aiming to merge with Albertsons “to bring lower prices to more customers, protect good-paying union grocery jobs and to better compete with massive retailers Walmart, Costco and Amazon”.

“If the merger is blocked, grocery prices will be higher and the larger, non-union retailers Walmart, Costco and Amazon will become even more powerful and unaccountable,” the Kroger spokesperson’s statement said.

The Associated Press contributed reporting