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Will the feds block a grocery megamerger? Kroger and Albertsons will soon find out
Will America’s two largest grocery store chains get to become one?
That’s the question before U.S. regulators, who are deciding whether to block Kroger’s $24.6 billion purchase of Albertsons. Several state attorneys general, too, have signaled they might sue to halt the deal.
At stake is a shakeup of the U.S. grocery landscape, where the companies say they face stiffening competition from Amazon, Walmart, Costco and even dollar stores. Employees, state officials and some lawmakers have argued the tie-up would reduce options for shoppers and workers, farmers and food producers.
Kroger, the biggest U.S. supermarket operator with 2,719 locations, owns Ralphs, Harris Teeter, Fred Meyer and King Soopers. Albertsons, the second-largest chain with 2,272 stores, owns Safeway and Vons. Kroger employs about 430,000 people; Albertsons 290,000.
The chains overlap particularly in Western states. The companies tried to assuage regulators’ concerns about diminishing grocery competition in those markets by agreeing to sell up to 650 stores as part of the deal.
However, antitrust experts in the Biden administration in the past have expressed skepticism about whether divestitures can sufficiently protect competition — on prices, jobs or terms for suppliers, for example. The regulators have also pushed for tougher scrutiny of megadeals, making this merger a high-profile test.
The Federal Trade Commission has been reviewing the proposed deal for over a year and is expected to make its call as early as this month. A lawsuit to stop the deal would not be a shocker. In May 2023, Kroger CEO Rodney McMullen said the grocery chains “committed to litigate in advance” if federal regulators or state attorneys general rejected the deal.
Combining forces to compete with Walmart
Ohio-based Kroger and Idaho-based Albertsons say together, they’d be in a stronger position to compete against Amazon online and Walmart in physical stores. The latter is the nationwide leader in groceries, selling more than Kroger and Albertsons combined.
“This merger will help protect the local community grocery stores that people love,” Albertsons CEO Vivek Sankaran said in his testimony at a Senate antitrust hearing in 2022.
The companies also argue that together they would be able to lower prices and pay higher wages. They emphasize that they offer union jobs, in contrast to their rivals.
Yet, the United Food & Commercial Workers Union, which represents more than 350,000 workers across the two grocery chains, opposes the merger. At public forums around Colorado, for example, workers noted it could become more difficult to negotiate a union contract with an even bigger, more dominant employer.
“The areas [our members] are concerned with are what happens to competition and food prices,” UFCW International President Marc Perrone said, adding that his members also worried about the long-term prospects for their current collective bargaining agreements.
Will selling off stores satisfy regulators?
Grocery competition historically gets assessed on a local level: Will shoppers in a given area have fewer options after the merger? Trying to address this, Kroger and Albertsons in September agreed to sell at least 413 stores in locations where they overlapped to C&S Wholesale Grocers, a supplier company that also runs some Piggly Wiggly supermarkets.
C&S agreed to buy retail locations in Arizona, California, Colorado and Wyoming, as well as some private brands, distribution centers and offices. The company said it was “committed to retaining” the stores’ existing workers, pledging to recognize the union workforce and keep all collective bargaining agreements.
Perrone said his union welcomed this decision, but remains concerned about the merger’s approval hinging on the sale to the much-smaller C&S:
“Can they operate efficiently and be competitive to where the customers, over the long haul, will stay with them?” he said.
Many antitrust experts in recent years have questioned the effectiveness of such divestitures.
For instance, when Albertsons merged with Safeway in 2015, the FTC required it to sell off 168 stores as part of the deal. Within months, one of its buyers filed for bankruptcy protection and Albertsons repurchased 33 of those stores on the cheap.
“Over time, there has been some skepticism about how well divestitures work,” said Kathleen Bradish, acting president of the American Antitrust Institute, which advocates for tougher scrutiny of mergers. “The divestitures that were deemed acceptable in the past may not be acceptable 1704815830.”
Indeed, federal antitrust regulators last year updated their guidelines for policing mergers to include, for example, greater focus not only on how deals affect prices or consumer choice but also suppliers or workers.
In this photo illustration, The Onion website is displayed on a computer screen, showing a satirical story titled Here’s Why I Decided To Buy ‘InfoWars’, on November 14, 2024 in Pasadena, California.
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The satirical website, The Onion, has a new deal to take over Infowars, conspiracy theorist Alex Jones’s far-right media company. If approved by a Texas judge, the deal would take away his Infowars microphone, and allow The Onion to resume its plans to turn the website into a parody of itself.
Families of those killed in the 2012 Sandy Hook Elementary School shooting, who sued Jones for defamation, want the sale to happen. They’re still waiting to collect on the nearly $1.3 billion judgement they won against Jones for spreading lies that they faked the deaths of their children in order to boost support for gun control. That prompted Jones’s followers to harass and threaten the families for years.
The families are also eager to take away Jones’s platform for spewing such conspiracy theories. The deal not only would divorce Jones from his Infowars brand, but it would turn the platform against him by allowing The Onion to mock his kind of conspiracy mongering and advocate for gun control.
The families “took on Alex Jones to stop him from inflicting the same harm on others” by using “his corrupt business platform to torment and harass them for profit,” said Chris Mattei, one of the attorneys for the families. “When Infowars finally goes dark, the machinery of lies that Jones built will become a force for social good, thanks to the families’ courage and The Onion’s vision, persistence and stewardship.”
A mourner visits the Sandy Hook Permanent Memorial on the 10th anniversary of the school shooting on Dec.14, 2022 in Newtown, Connecticut. Twenty-six people were shot and killed, including 20 first graders and 6 educators, in one of the deadliest elementary school shootings in U.S. history.
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For its part The Onion called it a “significant step in an effort to transform one of the internet’s more notorious misinformation platforms into a new comedy network for satire.” The company says it could announce its new rollout of Infowars in a matter of weeks if the judge approves the deal.
“Eight years, almost to the day, after the Sandy Hook parents first filed suit against Alex Jones, they’ll finally get some justice, and even some money,” said Ben Collins, CEO of The Onion. “This is a chance to make something genuinely new out of a very broken piece of media history.”
On its website Monday, The Onion posted a satirical message from the fictional CEO of its parent company, Global Tetrahedron, “Bryce P. Tetraeder,” stating a “dream is finally coming true.”
Jones’s posted on X Monday that “The Onion Has Fraudulently Claimed AGAIN That It Owns Infowars!!!” adding that “The Democrat Party Disinformation Publication Is Publicly Bragging About Its Plan To Silence Alex Jones’ Infowars And Then Steal & Misrepresent His Identity!”
On a podcast in March, Jones alluded to the impending demise of Infowars, saying, “We’re getting shut down. We beat so many attacks. But finally, we’re shutting down like the middle of next month,” before insisting, “We’re going to be fine.”
Jones suggested Monday he would appeal any court decision to approve the leasing deal. And even if he loses control of Infowars, Jones could continue to broadcast from another studio, under another name.
Jones’s attorneys did not respond to a request for comment.
More than a year ago, a federal bankruptcy judge rejected The Onion’s first attempt to buy Infowars through a bankruptcy auction, saying the process was flawed. Since then, the bankruptcy court clarified that because Infowars’ parent company, Free Speech Systems, is not itself in bankruptcy, its property should be handled instead by a Texas state receiver. That cleared the way for the new pending deal to lease Infowars to The Onion, with the hope that a future sale could be approved.
In papers filed in state court, the Texas receiver said he “determined that licensing the Intellectual Property is in the best interest of the receivership estate.”
The deal calls for The Onion to pay $81,000 a month to license the Infowars.com domain and brand name, which the receiver says will “cover carrying costs to preserve and protect the assets of the receivership estate” until an appeal filed by Jones is decided and the path is cleared for a sale.
Jones’s personal bankruptcy case is proceeding in federal bankruptcy court, where a trustee continues to sell off Jones’s personal property, including cars, homes, watches and guns, with proceeds intended for the families.
A memorial to massacre victims stands near the former site of Sandy Hook Elementary on Dec. 14, 2013 in Newtown, Connecticut, one year after Adam Lanza shot and killed 20 first graders and six adults at the school.
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US negotiators to head to Pakistan and Iranian cargo ship seized – a recappublished at 00:37 BST 20 April
Tankers in the Strait of Hormuz on Saturday
Here’s a recap of the latest developments.
US negotiators will head to Pakistan on Monday with the intention of holding further talks on ending the war, Trump says – but Iranian state media cites unnamed officials as saying Tehran has “no plans for now to participate”.
The prospect of further high-level negotiations – a White House official says Vice-President JD Vance will attend – comes amid reports of fresh attacks on commercial vessels.
Trump says the navy intercepted and took “custody” of an Iranian tanker attempting to pass through the US blockade, “blowing a hole” in the ship’s engine room in the process.
Earlier, in the same post announcing his representatives would travel for more talks, Trump renewed his threat to destroy Iranian energy sites and bridges if no deal is reached.
Reports in Iranian media over the weekend suggest Iran is continuing to work on plans to potentially apply a toll to ships passing through the strait – although it’s unclear if such a move will be implemented.
Iranian state TV cites unnamed officials as saying that “continuation of the so-called naval blockade, violation of the ceasefire and threatening US rhetoric” are slowing progress in reaching an agreement.
Trump also accused Iran of violating the ceasefire, saying more commercial ships have been attacked by Iran in the Strait of Hormuz.
A UK maritime agency reported two commercial ships came under fire in the strait on Saturday.
Iran’s foreign minister had said on Friday that the strait would be opened – which was shortly followed by Trump saying the US naval blockade of Iranian ports would remain in place until a deal is reached. Iran has since said the strait is closed again.
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