Federal Judge Nominated by President Biden Halts Kroger Albertson Merger

U.S. District Court Judge Adrienne Nelson, a President Biden nominee, has halted a proposed megamerger between Kroger and Albertson to the satisfaction of the Federal Trade Commission, Attorney General Aaron Ford (D), U.S. Senator Jacky Rosen (D), and the United Food and Commercial Workers (UFCW) union. The merger is reported to be the largest in U.S. history.

Earlier this year, the FTC sued to block the $24.6 billion dollar deal arguing the merger would harm consumers and union employees. Kroger and Albertson’s are the two largest employers of union grocery labor (approximately 800,000 employees in the United States) with a majority of their employees paying dues to the UFCW who, in turn, line the election coffers of Democratic candidates, exclusively.

In their lawsuit, the FTC alleges that “A combined Kroger/Albertsons, however, would gain increased leverage over workers and their unions—to the detriment of workers. The combined Kroger and Albertsons would have more leverage to impose subpar terms on union grocery workers that slow improvements to wages, worsen benefits, and potentially degrade working conditions. In some regions, such as in Denver, the combined Kroger/Albertsons would be the only employer of union grocery labor. Union grocery workers ability to leverage the threat of a boycott or strike to negotiate better CBA terms would also be weakened.”

In their public announcement, the FTC charged, “For thousands of grocery store workers, Kroger’s proposed acquisition of Albertsons would immediately erase aggressive competition for workers, threatening the ability of employees to secure higher wages, better benefits, and improved working conditions.”

Kroger and Albertson contend that the merger would make them more competitive against larger chains like Amazon, Costco and Walmart through greater purchasing power and competitive pricing. To preserve competition, Kroger would divest stores in areas where the chains currently have overlapping operations. The comprehensive divestiture plan would improve competition, create more choice, and provide local jobs. Without the merger, the supermarkets warn that they may have to close stores and lay off employees.

Judge Nelson’s ruling allows for an FTC in-house administration judge to review the merger’s potential implications. “Any harms defendants experience as a result of the injunction do not overcome the strong public interest in the enforcement of antitrust law, especially given the difficulty in disentangling the merger,” the judge opined in her ruling.

Today, Nevada Attorney General Aaron D. Ford released a statement after a federal judge halted the merger of grocery store chains Kroger and Albertsons, finding that a challenge is likely to succeed on the merits. pic.twitter.com/1PO0s3k1ym

— NV Attorney General (@NevadaAG) December 10, 2024

In a statement following the decision, Ford said he was very pleased with the decision and believes that “this is the first step toward ensuring consumers are protected from increased grocery prices that will place a further burden on Nevadan’s wallet” and vowed “to continue to work with our partners and the FTC to ensure this anti-consumer merger does not go forward.”

Attorney General Ford held various community listening sessions prior to joining the lawsuit filed by the Federal Trade Commission. After “studying the data” and listening to consumers and unions, Ford highlighted in an interview that he was motivated to join the lawsuit, in large part, over “labor concerns” and “wages and benefits.”

To note, rising union wages, compensation packages, and strikes increase prices to consumers. Yet, for those who understand Nevada and national politics, it should come as no surprise that the largest donor to Democratic candidates and officials is the UFCW. From 2020-2023, the UFCW Western States Council gave over $55,000 to various Democratic legislators and the Democratic Assembly Caucus.

In 2022, the UFCW PAC invested $75,000 in Nevada Democratic legislators and officials, including a $5,000 donation to the “Committee to Elect Aaron Ford.” Since Ford’s initial campaign for NV Attorney General, UFCW remains one of his largest contributors.

Senator Rosen, who pushed the FTC to block the merger, echoed his concerns of higher prices for consumers and said she was “glad to have helped block this corporate mega-merger and prevent higher costs for hardworking families.” Last month, the UFCW knocked doors for Rosen’s reelection campaign.