UNITED STATES NEWS

A state’s experience with grocery chain mergers spurs a fight to stop Albertsons’ deal with Kroger

Sep 16, 2024, 4:17 AM

FILE - A grocery cart rests in a cart return area with a sign for Albertsons grocery store in the b...

FILE - A grocery cart rests in a cart return area with a sign for Albertsons grocery store in the background on Aug. 26, 2024, in Lake Oswego, Ore. (AP Photo/Jenny Kane, File)
Credit: ASSOCIATED PRESS

(AP Photo/Jenny Kane, File)

Lawyers for Washington state will have past grocery chain mergers – and their negative consequences – in mind when they go to court to block a proposed merger between Albertsons and Kroger.

The case is one of three challenging the $24.6 billion deal, which was announced nearly two years ago. The Federal Trade Commission is currently fighting the merger in federal court in Oregon, where closing arguments are expected Tuesday. Colorado has also sued to block the merger.

But if the merger goes through, Washington residents would feel the impact more than the people of any other state. Albertsons and Kroger own more than 300 grocery stores in the state and control more than half of grocery sales there.

Under a plan to ease regulators’ concerns, Kroger and Albertsons would sell 579 overlapping stores, 124 of them in Washington, if the merger goes through. That’s the highest number among the 19 states with stores on the list. The state attorney general’s office says the proposed buyer, C&S Wholesale Grocers, has little experience running stores or pharmacies.

Washington seeks to avoid the situation it found itself in a decade ago, when Albertsons bought the Safeway chain. To satisfy regulators concerned about that deal’s potential impact on supermarket competition and consumers, Albertsons sold 146 stores to Haggen, a small grocery chain based in Bellingham, Washington.

But Haggen struggled with the expansion. Within six months, it had closed 127 stores — including 14 in Washington — and laid off thousands of workers. Haggen sold its remaining stores to Albertsons in 2016. Now, 10 Haggen stores in Washington are on the list to be sold if the merger happens.

“It’s pretty terrifying,” said Tina McKim, a founding member of Birchwood Food Desert Fighters, a group that sprang up in 2016 after Albertsons closed a store in Bellingham’s Birchwood neighborhood.

Washington Attorney General Bob Ferguson, a Democrat who is running for governor, wants to block the merger not just in the state but nationwide. In its complaint, filed in King County Superior Court in Seattle, Washington says eliminating the “robust competition” that exists between Albertsons and Kroger would lead to higher prices, lower quality and, most likely, store closures.

Albertsons and Kroger say the merger would help them better compete with growing rivals like Walmart and Costco. They are trying to get the case dismissed, arguing a state court isn’t the proper venue to consider a nationwide ban.

“Under our federalist system, Washington cannot wield its antitrust law to dictate merger policy for the rest of the country,” Albertsons and Kroger said in a court filing.

Brad Weber, a Dallas-based partner with the law firm Locke Lord who specializes in antitrust issues, said the Superior Court judge could decide to halt the merger nationwide or limit his ruling to Washington. Judge Marshall Ferguson might also order the companies to make changes to their plans to divest stores to preserve competition.

Ferguson may also decide to delay the case until there’s a ruling from the U.S. District Court in Oregon. Weber said. In that case, the Federal Trade Commission has asked a judge to temporarily block the merger until it is considered by an in-house judge at the FTC.

Albertsons and Kroger insist that their plan, including the sale of stores to C&S, will lower grocery prices and preserve competition. But Washington residents like McKim remain skeptical.

In 2016, Albertsons acquired a Haggen supermarket and then promptly closed an Albertsons store about a mile away in Birchwood. When it sold its former store two years later, Albertsons included a restriction: for the next 20 years, no grocery store could open in the Birchwood shopping plaza.

It was a huge blow to the community, McKim said. For 35 years, the Birchwood store had served older adults, students, people with disabilities and lower-income residents who suddenly had no easy access to fresh food.

“We were all really shocked by that. How is it possible to deny food access to a neighborhood?” McKim said. “It made it really hard for anyone without a car to be able to go to another grocery store.”

McKim’s group tries to fill the void by collecting food donations and bringing in produce from local farms, but “it’s nowhere near the level of access people need,” she said.

This summer, after an investigation by Washington’s attorney general, Albertsons removed the restriction on the shopping plaza. A Big Lots that moved into the former grocery store is closing soon, McKim said, and she hopes the space will attract another supermarket. But even if it does, the community may never get back the unionized jobs it lost when Albertsons shut its doors, she said.

McKim said her area does have a Walmart, but it’s even further away from Birchwood than the Albertsons-run Haggen store, which is on the list of stores that would be sold to C&S. She’s also not convinced Kroger and Albertsons need to merge to compete with Walmart.

“This city is growing so quickly, the need for food is absolutely critical everywhere,” McKim said. “When you see other stores succeed, it’s because they curate to the neighborhood’s needs.”

Comments

Comment guidelines: No name-calling, personal attacks, profanity, or insults. Please keep the conversation civil and help us moderate comments by reporting abuse.
comments powered by Disqus

United States News

Associated Press

Middle East latest: Israel says 15 trucks carrying aid have been allowed into northern Gaza

Israel says 15 trucks carrying aid have been allowed into northern Gaza, where aid groups have warned that a monthlong Israeli offensive could cause a famine. The trucks entered Gaza on Wednesday with aid from the United Arab Emirates, said the military body handling aid deliveries into the territory, COGAT. It said the aid consisted […]

58 minutes ago

Senate Majority Leader Chuck Schumer, D-N.Y., speaks with reporters at the Capitol in Washington, W...

Associated Press

Liberals pressure Senate Democrats to confirm more Biden judges while they can

WASHINGTON (AP) — Demand Justice, a progressive organization focused on the judiciary, is set to bombard Capitol Hill with a message for the closing weeks of the 118th Congress: Do “whatever it takes” to confirm President Joe Biden’s nominees as a second Donald Trump presidency looms. The Republican president-elect’s victory and the GOP takeover of […]

6 hours ago

Senate Minority Whip John Thune, R-S.D., meets with reporters after he was elected to succeed longt...

Associated Press

Trump issues early challenge to GOP Senate with defiant nominations

WASHINGTON (AP) — Just hours after Republican Sen. John Thune was elected as the incoming Senate majority leader on Wednesday, President-elect Donald Trump presented him with one of his first tests — an announcement that he intends to nominate controversial Rep. Matt Gaetz as attorney general. The Florida Republican is one of the more universally […]

6 hours ago

FILE - Sen. Marco Rubio, R-Fla., arrives before Republican presidential candidate former President ...

Associated Press

Trump’s mainstream picks for top foreign policy posts could reassure allies — and worry China

WASHINGTON (AP) — President-elect Donald Trump is famously unconventional, but he made conventional picks for his two top foreign policy positions. That could be reassuring to American allies, while China and Iran have reasons to be wary. Trump on Wednesday announced his choice of Sen. Marco Rubio for secretary of state. Two days earlier, he […]

6 hours ago

Maribel Hidalgo, 23, of Caracas, Venezuela, stands for a portrait with her son, Daniel, 2, outside ...

Associated Press

1 million migrants in the US rely on temporary protections that Trump could target

NEW YORK (AP) — Maribel Hidalgo fled her native Venezuela a year ago with a 1-year-old son, trudging for days through Panama’s Darien Gap, then riding the rails across Mexico to the United States. They were living in the U.S. when the Biden administration announced Venezuelans would be offered Temporary Protected Status, which allows people […]

6 hours ago

FILE - The Capitol is seen in Washington, Nov. 4, 2024. (AP Photo/J. Scott Applewhite)Credit: ASSOC...

Associated Press

Republicans win 218 US House seats, giving Donald Trump and the party control of government

WASHINGTON (AP) — Republicans have won enough seats to control the U.S. House, completing the party’s sweep into power and securing their hold on U.S. government alongside President-elect Donald Trump. A House Republican victory in Arizona, alongside a win in slow-counting California earlier Wednesday, gave the GOP the 218 House victories that make up the […]

7 hours ago

Sponsored Articles

...

Collins Comfort Masters

Act Now: Secure Your HVAC Equipment Before Prices Rise in 2025!

Phoenix, AZ – As the year draws to a close, Collins Comfort Masters is urging homeowners and businesses to take advantage of current pricing on HVAC equipment.

...

Collins Comfort Masters

Collins Comfort Masters: Leading the Way in HVAC and Plumbing Services in Arizona

Tempe, AZ – Since its inception in 1985, Collins Comfort Masters has been a cornerstone in the HVAC and plumbing industry in Phoenix and the surrounding Valley.

...

Day & Night Air Conditioning, Heating and Plumbing

It wouldn’t hurt to get your AC checked after Arizona’s excruciating heat wave

A well-maintained air conditioning unit is vital to living a comfortable life inside, away from triple-digit heat in Arizona.

A state’s experience with grocery chain mergers spurs a fight to stop Albertsons’ deal with Kroger