Arizonan Secretary of State Adrian Fontes, along with 6 other Secretary of State from around the nation, have written a formal petition to the Federal Trade Commission asking them to block the acquisition of Albertsons Companies Inc by grocery giant Kroger. All seven drafters of the letter are elected Democrats.
With the merger, Kroger would assume ownership of all Albertsons affiliated chains, some notable grocery giants like Safeway, Vons, and Ralphs would all now be owned by Kroger Co.
The proposed $25 billion merger has not only drawn attention from industry watchers but also from public officials concerned about its impact.
In the letter, concerns are raised on the fact that combined, Kroger and Albertsons would hold almost a quarter of the U.S. food retail market.
“Once there is such consolidation in the market, many consumers will no longer have choice. Kroger-Albertsons will have no competitive incentive to bring down prices and – despite what Kroger-Albertsons’ claims – consumers will be powerless to hold the company accountable to promises of keeping prices low.” A snippet of the letter states.
It’s been reported that many Arizona residents share this fear of a grocery monopoly forming in their area.
Northeast Valley News spoke to Valley residents on what they think of the potential merger.
“It’s certainly a scary thought, you need competition in the market.” said Valley resident Mike Warner.
“It seems like there’s only gonna be a handful of groups who own everything soon, every year it’s news of the bigger fish swallowing a few more small fish.” said Phoenix native Vicky Alvarez.
The merger is presented by Kroger and Albertsons as a strategic step to better compete against major players like Walmart and Amazon, who’ve recently expanded their footprints in the grocery sector. However, this merger might also result in the closure of up to 400 stores nationwide. Secretary Fontes highlights in the letter that such closures could adversely impact low-income communities.
“It is the government’s responsibility to ensure that corporate monopolies do not cheat hardworking Americans into paying artificially high prices, so executives and shareholders can line their own pockets. Under the terms of the merger, Kroger and Albertsons will also need to divest up to 400 stores. It is likely the corporations will target the lowest performing stores – often those in low-income communities. This will certainly exacerbate issues of food accessibility and affordability that already exist.” Secretary Fontes letter says.
In response, Kroger indicates that their alliance with Albertsons promises lower prices and expanded choices for consumers. They believe that if the merger does not go through, large non-unionized competitors stand to benefit more.
Despite reassurance from Kroger Co, there exists a clear lack of trust between the public and the corporate group ahead of the deal.
