The Attorney General of Maryland, Anthony Brown, has officially joined the lawsuit being brought forth by the Federal Trade Commission against a proposed merger of Kroger and Albertsons. Attorney General Brown adding Maryland to the list of plaintiffs expanded the list to now include 8 total states as well as Washington D.C. These other states and D.C. have all had their own attorney generals throw their names into the hat as well to join the fight to prevent this merger of two pioneers in the grocery industry.
Both companies have confirmed that they do plan to contest and challenge this lawsuit.
Kroger and Albertsons announced that they are set to merge in October of 2022. Both sides claimed that they wanted to merge in order to strengthen themselves against other competitors. They were hoping that as one unit they would better compete with companies like Walmart, Amazon, and Costco.
The two companies together employ almost one million people across the country. Each brand has other companies under its name as well, which are included in these counts. For example, Albertsons owns Safeway and Pavilions and Kroger owns Ralphs and Food 4 Less. In just Maryland, the two brands own over 80 of the grocery stores in the state.
Attorney General Brown expressed concerns similar to his other counterparts who also joined the lawsuit.
Brown specifically said that he is worried this deal will greatly affect two things in Maryland and across the entire United States. The first concern he expressed is how the deal will impact jobs. Mergers often mean major layoffs for all participating parties, and he does not know if we can sustain such a widespread issue. His second concern is how the deal will affect the price we will pay at the store. Inflation has already vastly increased the cost of food and this merger could possibly worsen that tenfold. Additionally, when competition is reduced, prices typically increase because companies find they can charge higher prices.
This lawsuit specially lays out that the merger also expressly goes against the Federal Clayton Act. This law prevents a merger of two entities being done as a means to reduce competition or form a monopoly. The already leading grocery brands merging into one even bigger one borders on monopoly territory to many critics of the deal.