COLORADO SPRINGS — A proposed merger between two of the country's largest grocery store chains was blocked by a federal judge Tuesday. Another judge in a separate lawsuit on the merger in Washington state also ruled against the merger, between both rulings it could end the possibility of the merger altogether.
A ruling has not been made in a similar case in Colorado.
The rulings were praised by grocery store workers, farmers, and Colorado Attorney General Phil Weiser who called the federal ruling "a victory".
“All along, we have made the case that the Kroger/Albertsons merger is illegal and bad for Colorado. It is bad for grocery shoppers who are already feeling pinched at the checkout counter. It’s bad for workers and their job security and benefits. And it’s bad for farmers and other suppliers because there would be fewer local food options available at the store," Weiser said in a statement sent to News5.
Kroger and Albertsons argued the merger was needed for the businesses to compete with major retailers such as Wal-Mart and Amazon, arguing that with the merger it would only make up about 15% of the total market share.
The nearly $25 billion acquisition would have made it the largest grocery store merger in history.
"Depending on where you are in the country, that 15 percent is going to look a lot different," Scott Van Ness a business instructor at University of Colorado Colorado Springs (UCCS) said, "so in this part of the country we don't have Publix or some of the ones we'll see in the southeast or other parts of the country, they would control a huge part of the market."
Opponents of the merger argued it would raise prices, something Van Ness said is unclear.
"I think [the ruling] is a win for consumers. I don't know if we would've seen prices go up right away but we keep the same kind of set up that we had before without another giant in the food industry," Van Ness said.
According to News5's sister station in Cincinnati, WCPO, where Kroger is headquartered, an attorney previously said it would walk away from the merger if an injunction was put in place.
WCPO reports the following response from both Kroger and Albertson's.
Kroger released the following statement about the federal court ruling:
“Through its proposed merger with Albertsons, Kroger would invest more than $1 billion in lower grocery prices, invest an additional $1 billion in higher grocery worker wages, and invest an additional $1.3 billion to improve Albertsons stores. Kroger is disappointed in the opinions issued by the U.S. District Court for the District of Oregon and the Washington State Court, which overlook the substantial evidence presented at trial showing that a merger between Kroger and Albertsons would advance the company’s decades-long commitment to lowering prices, respecting collective bargaining agreements, and is in the best interests of customers, associates, and the broader competitive environment in a rapidly evolving grocery landscape. The Company is currently reviewing its options.”
Albertsons also said it's reviewing its options:
“We are disappointed by the U.S. District Court’s decision to grant the FTC’s request for a preliminary injunction. We believe we clearly outlined during the proceedings how the proposed merger would expand competition, lower prices, increase associate wages, protect union jobs, and enhance customers’ shopping experience. We are carefully reviewing the Court’s opinion and are evaluating our options in accordance with the merger agreement.”
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