Major food conglomerates that hiked prices amid the pandemic could benefit a $24.6 billion grocery megamerger facing a federal court challenge from the Federal Trade Commission over concerns that the newly created company would raise Americans’ food prices.
The country's food supplier system is dominated by corporate conglomerates that stand to flourish under the megamerger between The Kroger Co. and Albertsons, experts say.
“Throughout the food supply chain, we've got these market power bottlenecks,” Randy Stutz, president of the American Antitrust Institute, told Salon. “We need to prevent any and all of them from getting any worse than they already are.”
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Under the deal, The Kroger Co. would acquire Albertsons, combining America’s two largest grocery chains in the biggest supermarket merger in U.S. history. The combined company would control 22% of the U.S. food retail market; Kroger and Albertsons collectively own and operate nearly 5,000 supermarkets and 4,000 pharmacies across nearly 40 brands in 48 states. There’s a decent chance you shop at one of Kroger’s or Albertsons’ supermarkets: Kroger Co. owns brands like Dillons, Ralphs, Mariano’s and King Soopers; Albertsons’ regional brands include Safeway, Jewel-Osco and Randalls.
Kroger says the sale will unlock efficiencies that would lead to “lower prices and more choices for more customers.” The FTC argues the deal would “eliminate fierce competition,” likely translating into higher prices and a smaller variety of brands, among other impacts. Four out of five consumer product mergers in the U.S. (which includes food retailers) lead to higher prices for customers, according to a 2008 study from the FTC and Princeton University.
Antitrust experts and food economists told Salon the merger could create a dominant grocery giant with power to raise food prices, largely without losing customers. A combined Kroger-Albertsons could also create conditions in........