Kroger, Albertsons merger backlash intensifies with opposition from consumer group

The list of those against the $24.6 billion Kroger, Albertsons merger continues to grow. The Center for Science in the Public Interest (CSPI), a consumer advocacy organization, is now calling on the Federal Trade Commission to block the merger, stating it “would result in fewer grocery stores and higher food prices — negatively impacting food and nutrition security for consumers around the country.”

In its call for FTC rejection, CSPI said the merger would control 22% of the food retail market and make it the nation’s second-largest food retailer. In addition, post-merger the combined companies plus the largest food retailer, Walmart, would control 55% of the food retail market.

The CSPI also said it was joining the “Stop the Merger” coalition, which is a national and state-level effort to oppose the deal between Kroger and Albertsons and is backed by more than 100 organizations.

Last week it was the United Food and Commercial Workers International Union (UFCW) and its 1.3 million members who voted unanimously to reject the Kroger, Albertsons merger.

“Given the lack of transparency, and the impact a merger between two of the largest supermarket companies could have on essential workers – and the communities and customers they serve – the UFCW stands united in its opposition to the proposed Kroger and Albertsons merger,” said UFCW International President Marc Perrone.

Related:Largest union officially rejects Kroger, Albertsons merger

Perrone said his union has not been provided any definite assurances when it comes to store divestiture and how it might impact workers. The union also said it speculates that those who buy the divested stores, which could number close to 600, may face a high amount of debt.

In an interview with Bloomberg, Kroger CEO Rodney McMullen said he believes store divestitures will run smoothly and that there are a handful of buyers out there who could take on the purchase without much debt. The Kroger chief, however, did not say whether the entire lot of divested stores, which could be as many as 650, would be sold to one buyer or to multiple companies.

Then there was the report from the Economic Policy Institute which revealed workers at Kroger and Albertsons, and other grocery stores, could lose a total of over $330 million annually if the deal goes through. 

Kroger immediately dismissed the claim, stating the following in a email to Supermarket News:

“The conclusions of the Economic Policy Institute article are erroneous and based on a faulty, biased and poorly sourced analysis that ignores both companies’ long track record of investing in associates. The report also egregiously ignores Kroger’s public commitment to invest an additional $1 billion to increase wages and expand industry-leading benefits starting on day one following close. This commitment builds on the incremental $1.9 billion Kroger has invested in wages and comprehensive benefits since 2018. Higher wages and more opportunities for our associates would help all grocery workers by raising the bar for compensation in areas in which we operate.”

Related:Kroger, Albertsons merger could cost workers $330M annually

McMullen and Boise, Idaho-based Vivek Sankaran have even gone to the extent of publishing a joint op-ed, debunking three myths about the merger, including the loss the jobs and the negative impact to unions.

Still, the battle is getting heated as the merger gets closer to a decision by the FTC. McMullen said during the Bloomberg interview negotiations are going as planned and are on schedule.

The CSPI coalition has written numerous letters to the FTC and state attorney generals, held meetings with federal and state elected officials and regulators, held press conferences and virtual town halls, attended public events on the merger hosted by government officials, and participated in various local community activities opposing the merger.

“Food prices are higher than ever before, and forty million Americans live in areas with low incomes and limited access to healthy, affordable food,” said CSPI president Dr. Peter G. Lurie. “The proposed merger of Kroger and Albertsons will likely mean higher prices, fewer stores, and less competition. It might be a good move for executives and shareholders, but the merger would be an economic blow to Americans, especially those whose jobs would be lost post-merger.”