Kroger, Albertsons merger could be affected by new FTC, DOJ guidelines

The Kroger, Albertsons $24.6 proposed merger has received opposition from many unions and other groups, but now it might be getting pushback from the Federal Trade Commission and the Department of Justice.

The two departments recently released an updated version of the general guidelines the departments follow around merger deals. These guidelines are the means by which the agencies review mergers and acquisitions to determine compliance with federal antitrust laws. The written rules have been changed six times since they were first introduced in 1968 — with the most recent revision being in 2020.

Of the proposed new merger guidelines, the ones that could affect the potential Kroger, Albertsons merger concern anti-competition. (“Mergers should not significantly increase concentration in highly concentrated markets,” “Mergers should not otherwise substantially lessen competition or tend to create a monopoly”).

Critics of the Kroger, Albertsons merger have said the deal would send the grocery market into a tailspin. Immediately following the merger announcement, the National Grocers Association said they thought the merger deal could “raise serious questions about a single supermarket giant gaining unprecedented dominance over the nation’s food supply chain,” and more recently the group touted the FTC’s revised merger guidelines:

Related:Largest union officially rejects Kroger, Albertsons merger

“NGA is pleased to see federal antitrust enforcers take seriously the competitive concerns that arise when dominant firms abuse their buyer power to impose discriminatory terms on their rivals,” said NGA Senior Vice President of Government Relations and Counsel Chris Jones. 

Several unions have also come out voicing their opposition to the proposed merger. Among the concerns is job security, as the deal could eliminate a number of positions and impact salaries. Other critics of the merger deal say they worry the deal will lead to increased grocery prices.

“Unchecked consolidation threatens the free and fair markets upon which our economy is based,” said Attorney General Merrick Garland. “These updated merger guidelines respond to modern market realities and will enable the Justice Department to transparently and effectively protect the American people from the damage that anticompetitive mergers cause.”

Representatives from Albertsons and Kroger told Supermarket News they did not have a comment on the proposed guidelines. However, both companies have stressed in the past that the merger deal will have a positive impact on employees, and that grocery prices will not rise.

Related:Kroger, Albertsons CEOs speak out about merger in op-ed

Over 5,000 members of the public provided comment that went into the new merger draft guidelines, and four listening sessions were conducted. 

The public will have 60 days to weigh in on the new guidelines.