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A federal judge in Oregon has blocked the proposed $25 billion merger between Kroger and Albertsons, the largest supermarket merger in U.S. history, citing concerns over its impact on competition and consumer costs.
The decision is a significant blow to the two grocery giants, casting doubt on the merger’s future. Neither Kroger nor Albertsons immediately commented on the ruling.
Judge Rejects Merger’s Arguments
The merger, announced in 2022, sought to unite the fifth- and tenth-largest retailers in the U.S., which together own grocery brands such as Safeway, Vons, Harris Teeter, and Fred Meyer. The companies argued the merger would help them compete against non-unionized giants like Walmart, Amazon, and Costco.
Kroger CEO Rodney McMullen promised the deal would lower grocery prices by $1 billion and position the companies as a stronger alternative to larger competitors. However, Judge Adrienne Nelson disagreed, stating in her ruling that supermarkets are distinct from other grocery retailers and that the merger would reduce competition, likely leading to higher prices for consumers.
White House and FTC Back Antitrust Ruling
The White House praised the decision. National Economic Council Deputy Director Jon Donenberg said, “The Kroger-Albertsons merger would have been the biggest supermarket merger in history — raising grocery prices for consumers and lowering wages for workers. Our administration is proud to stand up against big corporate mergers.”
The Federal Trade Commission (FTC) had sued to block the deal in February, citing its potential to harm millions of Americans by raising grocery prices and reducing wages for workers. Attempts by Kroger and Albertsons to address antitrust concerns by divesting 579 stores to C&S Wholesale Grocers failed to sway Judge Nelson, who agreed with the FTC’s assessment that the divestiture was insufficient.
Inflation and Opposition Helped Derail Merger
High food prices and bipartisan political opposition added to the merger’s troubles. Small grocers and labor unions also strongly opposed the deal, arguing it would increase the companies’ leverage with suppliers, squeezing independent stores.
Rebecca Wolf, senior food policy analyst at Food & Water Watch, welcomed the ruling, saying, “Persistently high food prices are hitting Americans hard, and a Kroger-Albertsons mega-merger would have only made it worse.”
Broader Antitrust Implications
The case is seen as a key moment for antitrust enforcement. Under outgoing FTC Chair Lina Khan, the agency has pursued high-profile antitrust cases against tech giants such as Google and Amazon. The ruling could set a precedent for corporate mergers across industries, especially those involving consumer goods.
With the merger blocked, the grocery industry faces continued consolidation challenges, as traditional supermarkets struggle to compete with major players like Walmart, Costco, and online retailers.