Anti-trust lawsuit involving the two biggest grocery retailers starts Monday (2024)

A proposed merger of two grocery giants, Albertsons and Kroger, goes to court tomorrow in a case that could have big implications for consumers.

AYESHA RASCOE, HOST:

A megamerger of supermarket chains goes to court tomorrow. Federal regulators have sued to stop the deal between Kroger and Albertsons, which would combine the two largest grocery retailers. That's as the question of high grocery prices is top of mind for many consumers. So we invited NPR's Alina Selyukh to fill us in on this legal case and the state of the grocery industry in the U.S. Alina, thanks for being with us.

ALINA SELYUKH, BYLINE: Hello, hello.

RASCOE: So let's start with some more details about this merger. What's going on here?

ALINA SELYUKH: Sure. So this is one of the biggest grocery deals ever. Kroger wants to buy Albertsons for about $25 billion. Kroger has a bunch of brand names, including Harris Teeter, Ralphs, Fred Meyer, King Soopers, Albertsons. You might know also a Safeway and Vons. This deal faces three lawsuits that want to block it - one in Colorado, one in Washington State - the chains overlap, particularly in Western states, so that's why. And then there's this really big one by the Federal Trade Commission alongside nine state attorneys general, and that is the one that's going to court first. There will be more hearings and trials and other court cases in the coming weeks. For now, the deal is on pause.

RASCOE: The companies want this. The authorities are suing. What do we know about how this merger would fit in the grocery landscape? Would it help or hurt shoppers?

ALINA SELYUKH: That is exactly the central question here. The federal experts argue that, in this case, bigger is not better, that the deal would turn these two companies into a grocer colossus with more power over suppliers, more power over workers and shoppers, simply giving us fewer choices where to get groceries. The companies make the argument that they are not the colossus. Amazon is, Walmart is. Walmart is not a grocery chain in the same vein as Kroger, but it does sell the most groceries in America. And so Kroger and Albertsons argue that together, they can be a bigger competitor to these giants, or they can wilt away on their own.

RASCOE: Well, are they actually wilting away?

ALINA SELYUKH: You know, not at the moment. They are making money, but they're not as big as Amazon or Walmart. They're not as fast-growing as dollar stores, and so they are pointing to all of these companies as their competitors. And Kroger is actually doing something else that's pretty extraordinary. The company has turned the tables and gone after the federal regulators themselves. Kroger has sued the Federal Trade Commission using a recent Supreme Court ruling - it's fairly complicated - just to say that Kroger is testing new legal ground kind of questioning the federal government's authority to block mergers.

RASCOE: So there could be big ripple effects from this merger case all around. Meanwhile, of course, grocery prices have taken center stage in the presidential campaign. Vice President Kamala Harris and former President Donald Trump have both claimed they would bring prices down. How are they saying they'll do that?

ALINA SELYUKH: We are lacking a lot of the specifics about their plans. So Trump blames the Biden administration for inflation for higher prices. Harris has proposed a ban on price gouging, which has been fairly controversial in the absence of specifics. Generally, food prices are an easy and appealing political target. You know, everyone eats. It doesn't matter that some grocery prices are declining. We're still comparing prices cumulatively to pre-pandemic, which means, you know, every time I get a grocery bill, I get a jolt remembering how it used to be just a couple of years ago. So in that context, it is even harder to see how a merger that would take two of the largest supermarkets, combine them into one bigger, more powerful one would go through without a fight.

RASCOE: That's NPR's Alina Selyukh Alina, thank you so much.

ALINA SELYUKH: Thank you.

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