Elizabeth Warren Bernie Sanders

U.S. Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) walk and talk in the Senate subway on their way to a vote on Capitol Hill in Washington, D.C. on September 22, 2022.

(Photo: Bill Clark/CQ-Roll Call, Inc. via Getty Images)

Citing 'Aggressive Profiteering,' Sanders and Warren Urge FTC to Stop Kroger-Albertsons Merger

"Kroger's and Albertsons' anti-competitive policies have harmed consumers, workers, small businesses, and the economy as a whole," the two senators wrote in a letter also signed by Rep. Jan Schakowsky.

Citing the "anti-competitive and antiworker records of Kroger and Albertsons," U.S. Sens. Elizabeth Warren and Bernie Sanders, along with Rep. Jan Schakowsky, on Tuesday urged the Federal Trade Commission to oppose the supermarket giants' proposed merger.

"The new Kroger could increase its monopoly power and further disenfranchise its own workers and consumers."

In a letter to Federal Trade Commission (FTC) Chair Lina Khan, Warren (D-Mass.), Sanders (I-Vt.), and Schakowsky (D-Ill.) warned that the $24.6 billion merger of two of the nation's biggest supermarket chains "could exacerbate existing antitrust, labor, and price-gouging issues in the grocery sector and further raise prices for vulnerable Americans."

"Throughout the pandemic and its economic aftermath, Kroger and Albertsons reported record profits and richly rewarded their shareholders and executives with bonuses and stock buybacks, even as both companies took steps to prevent workers from receiving hazard pay and boasted about their abilities to raise consumers' prices," the letter notes. "Kroger's and Albertsons' histories of aggressive profiteering during the pandemic present a dangerous roadmap for how a larger and more powerful company would act if this acquisition were allowed to proceed."

"The new Kroger could increase its monopoly power and further disenfranchise its own workers and consumers," the lawmakers continued. "The FTC, when evaluating the potential market and consumer effects of the Kroger-Albertsons acquisition, should closely consider both companies' history of monopoly, labor, and consumer abuses, and whether this acquisition would exacerbate these abuses for American families."

As Warren's office notes:

Early in the pandemic, both companies faced allegations of price-gouging. A lawsuit filed in Texas alleged that 19 grocery stores, including Kroger and Albertsons, participated in price-gouging in the first months of the pandemic, nearly tripling the price of eggs during the state of disaster in March 2020. In 2021, Kroger and Albertsons continued to raise their prices, citing rising costs and inflation, even as they reassured investors that their businesses stood to benefit. In June 2021, on a call with investors, Kroger CEO Rodney McMullen admitted that "our business operates the best" with some inflation, allowing the company to raise prices and boost profits at the expense of consumers.

In addition, lawmakers caution that Albertsons' proposed $4 billion dividend to shareholders may weaken Albertsons' ability to compete regardless of whether the acquisition is finalized and may constitute "gun jumping," a form of collusion illegal under the Sherman [Antitrust] Act.

"If the merger is approved, the $4 billion payout will weaken both the merged entity and the new SpinCo company, saddling those companies with excess debt rather than allowing them to invest in workers, improving stores, or reducing prices for customers," the lawmakers assert in their letter.

Kroger and Albertsons are currently the country's second- and fourth-largest grocers, respectively. As HuffPostreports, the two companies "have a combined 5,000 stores and 710,000 workers in the U.S., with dozens of chains between them, such as Fred Meyer and Ralphs (Kroger) and Safeway and Jewel-Osco (Albertsons)."

The outlet continues:

Workers at many stores under both companies are represented by the United Food and Commercial Workers union. At least four affiliates of that union have come out against the merger, saying they have concerns about store closures and layoffs. One Kroger worker recently told Reuters: "I wish they would put their money toward trying to lower prices and increase wages, rather than gobbling up the competition."

"Kroger's and Albertsons' anti-competitive policies have harmed consumers, workers, small businesses, and the economy as a whole," the lawmakers' letter concludes, "and the FTC should use its authority under the Clayton Act and the Sherman Act to prevent the companies from merging, reducing competition, and making these problems even worse."

Labor unions and numerous Democratic U.S. lawmakers including Sens. Amy Klobuchar (Minn.), Cory Booker (N.J.), and Richard Blumenthal (Conn.), Reps. Jimmy Gomez (Calif.), Katie Porter (Calif.), and Kim Schrier (Wash.) have voiced opposition to the merger. So have progressive advocacy groups such as the American Economic Liberties Project, Food & Water Watch, and Public Citizen.

"With food prices rising, the last thing Americans need is a supermarket merger that will spike food prices even further," Public Citizen president Robert Weissman argued earlier this month. "Rejecting this merger proposal should be a no-brainer for federal antitrust officials."

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