Current:Home > StocksA state’s experience with grocery chain mergers spurs a fight to stop Albertsons’ deal with Kroger -Wealth Momentum Network
A state’s experience with grocery chain mergers spurs a fight to stop Albertsons’ deal with Kroger
View
Date:2025-04-18 00:05:59
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.”
veryGood! (5582)
Related
- South Korean president's party divided over defiant martial law speech
- Former players explain greatness Tara VanDerveer, college basketball's winningest coach
- Burton Wilde: Operational Strategies in a Bull Stock Market.
- Woman accused of killing pro-war blogger in café bomb attack faces 28 years in Russian prison
- Are Instagram, Facebook and WhatsApp down? Meta says most issues resolved after outages
- Homicide rates dropped in big cities. Why has the nation's capital seen a troubling rise?
- Trump may testify in sex abuse defamation trial, but the court has limited what he can say
- Not Gonna Miss My … Shot. Samsung's new Galaxy phones make a good picture more of a sure thing
- Could Bill Belichick, Robert Kraft reunite? Maybe in Pro Football Hall of Fame's 2026 class
- Elderly couple, disabled son die in house fire in Galveston, Texas
Ranking
- Bill Belichick's salary at North Carolina: School releases football coach's contract details
- Man dies in shooting involving police in Nashua
- Homicide rates dropped in big cities. Why has the nation's capital seen a troubling rise?
- Storm Isha batters UK and Ireland and leaves tens of thousands without power
- 2 killed, 3 injured in shooting at makeshift club in Houston
- Piedad Cordoba, an outspoken leftist who straddled Colombia’s ideological divide, dies at age 68
- Storm Isha batters UK and Ireland and leaves tens of thousands without power
- As avalanches roar across Colorado, state officials warn against going in the backcountry
Recommendation
North Carolina justices rule for restaurants in COVID
National Cheese Lover's Day: How to get Arby's deal, enter Wisconsin cheese dreams contest
Massachusetts police officer shot, injured during gunfire exchange with barricaded man
Nick Dunlap becomes 1st amateur winner on PGA Tour since 1991 with victory at The American Express
'Most Whopper
If you donate DNA, what should scientists give in return? A 'pathbreaking' new model
Horoscopes Today, January 21, 2024
Justin Timberlake debuts new song 'Selfish' at free hometown concert, teases 2024 album