Colorado AG sues to block Kroger-Albertsons merger

(DENVER) — Colorado’s Attorney General, Phil Weiser, filed a lawsuit on Wednesday, Feb. 14, to block a $24.6 billion merger between Kroger and Albertsons.

The two supermarket chains are currently in competition with one another for customers and employees. The merger would eliminate this competition and according to the lawsuit, this consolidation in a market that is already concentrated would be detrimental to Colorado shoppers, workers, and suppliers.

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“Coloradans are concerned about undue consolidation and its harmful impacts on consumers, workers, and suppliers,” stated Weiser. “After 19 town halls across the state, I am convinced that Coloradans think this merger between the two supermarket chains would lead to stores closing, higher prices, fewer jobs, worse customer service, and less resilient supply chains.”

Currently, the two stores keep track of one another’s prices and adjust to stay competitive. If competition was removed, there would be less incentive for stores to keep prices low. This would be especially detrimental for smaller communities where Kroger and Albertsons stores are the only stores in town. Combining them would leave consumers in those communities with no other options—unless they want to drive to a neighboring town. A town with only one grocery store would also be in danger of a supply chain failing, leaving consumers with no other options.

Kroger proposed an idea to sell off 413 of their stores to C&S Wholesale Grocers, as a way to mitigate the issues with the merger. C&S currently has 23 stores, none of which are in Colorado. Analyzing the likely outcome of the divestiture, the lawsuit asserted that it would be inadequate, citing a previous attempt at doing something similar during a merger between Safeway and Albertsons.

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“Our conclusion in this case—and our skepticism about the proposed divestiture—is strongly supported by what happened in the Albertsons/Safeway merger, where stores closed, jobs were lost, consumers suffered, and the divestiture failed miserably to preserve competition,” stated Weiser. “We won’t risk another such failed divestiture and we will fight hard to preserve competition for consumers, workers, and suppliers, all of whom have raised serious concerns about the remedy proposed in this case.”

Attorney General Weiser held listening sessions statewide in 2023 to gather information and feedback from Coloradoans on the merger, and his office also conducted an online survey and these responses were taken into account.

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