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The parent companies of 2 of Alaska’s grocers want to merge. Here’s what we know.

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The parent companies of 2 of Alaska’s grocers want to merge. Here’s what we know.



Shoppers come and go from Fred Meyer and Carrs stores that face each other across the Seward Highway in Midtown Anchorage on Thursday, Aug. 8, 2024. The parent companies of the competing businesses, Kroger and Albertsons, want to merge. (Matt Faubion/Alaska Public Media)

Last week, Alaska Congresswoman Mary Peltola joined 27 other D.C. lawmakers from 16 states in a legal brief backing a lawsuit by federal regulators to block a massive, national grocery store merger. 

Most Alaskans live in a community where a Fred Meyer store competes directly with a Carrs or a Safeway, so the proposal for one parent company to buy the other for $24.6 billion has a lot of Alaska consumers worried. 

Here’s what we know about where the proposal is now, after it was first announced in October of 2022. 

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What’s at stake? 

If you take what the companies are saying in good faith, not much. They’ve made sweeping promises about the good things that will happen and the bad things that won’t if Kroger, which owns Fred Meyer, is allowed to buy Albertsons, which owns Safeway and Carrs. The companies say investors, customers, workers and communities are all supposed to benefit. 

“We are confident our transaction with the proposed divestitures will mean lower prices and more choices for customers,” Kroger CEO Rodney McMullen said in a video about the proposed merger. “It will mean more opportunities for retail associates to grow their career while we secure the future of good paying union jobs.”

Here are some of the specific promises Kroger and Albertsons have made: 

  • No store closures
  • No pharmacy closures
  • No front-line job losses with protection for worker pay and benefits
  • A $500 million investment in reducing prices
  • A $1 billion investment in employee benefits
  • A $1.3 billion investment to improve Albertsons stores

Kroger points to its 20-year track record that includes lowering its profit margins to keep prices down amid past acquisitions.

How can all of these promises be possible? 

The idea is if Kroger and Albertsons merge, they’ll be in better shape to compete with even bigger retailers, like Costco and Walmart, as well as growing competitors, like dollar stores that now sell groceries and even Amazon. Bigger scale means bigger efficiencies, and that’s where the upside is supposed to come from.

Of course, most Alaskans live in communities where Fred Meyer competes with Carrs or Safeway. Specifically, that’s Anchorage, Eagle River, Palmer, Wasilla, Fairbanks, Juneau and Soldotna.

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Federal regulators are wary of mergers because they can be anticompetitive, concentrating too much market power and hurting regular shoppers. To try to win regulators’ approval, Kroger and Albertsons say they’re prepared to sell off all 15 of the Carrs and Safeway stores in those Alaska communities, plus three more in Girdwood, Kenai and North Pole, to a company called C&S Wholesale Grocers based in New Hampshire. 

The Safeways in Seward, Valdez, Kodiak, Ketchikan, Nome and Unalaska are not on the divestment list and would remain with the merged company.

Nationally, Kroger and Albertsons plan to sell a total of 579 stores, plus six distribution centers and a dairy plant, to C&S. 

Again, McMullen says these divested stores won’t close, because C&S is committed to running them as they are today. 

Albertsons CEO Vivek Sankoran says C&S will make the landscape more competitive. 

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“Their deep industry knowledge and experience gives us great confidence in their ability to become even fiercer competitors moving forward,” Sankoran said in the video. 

C&S CEO Eric Winn also says his company is playing the long game.

“We are confident this expanded divestiture package will provide the stores, supporting assets and expert operators needed to ensure these stores continue to successfully serve their communities for many generations to come,” Winn said in an April press release.

The United Food and Commercial Workers Local 555, which represents 30,000 grocery store workers in Oregon, Idaho and Washington, came out in support of the merger in February. However, the parent union, which represents 1.2 million workers, voted last year to oppose the merger. Other UFCW locals, including Alaska’s, also oppose the merger. 

So what’s the problem? Why do people oppose the merge?

Basically, opponents just don’t believe the companies, and there isn’t anything in place to hold them to their promises. 

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In Alaska, the opponents include Democratic Congresswoman Mary Peltola, 24 state lawmakers, the grocery store workers’ union and lots of regular Alaskans.

“It’s a huge issue for Alaskans that resonates. It’s not a political issue, it’s a pocketbook issue,” said Veri di Suvero, executive director of the Alaska Public Interest Research Group, a statewide consumer advocacy nonprofit that also opposes the merger. “Whether or not it’s in good faith, about these spinoffs, we’ve seen over and over again that they don’t work.”

Di Suvero points back to 1999, when Safeway bought out Carrs. AKPIRG and Alaska’s attorney general got involved, and they worked out a deal to sell off seven stores to let the merger go through.

Six of those stores became Alaska Marketplace grocery stores. They all closed within about a year. 

The seventh, at the University Center mall in Midtown Anchorage, survived and became a different grocery store, Natural Pantry, which eventually outgrew the space and built its current, standalone location off 36th Avenue.

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Fast forward to 2015, and Safeway got swallowed up by Albertsons. Federal regulators approved that deal after the companies agreed to divest 168 stores. 146 went to a small Washington grocery retailer called Haggen. 

Haggen wasn’t successful, either. Within a year, Haggen sued Albertsons and accused it of sabotaging stores it bought. It got sued back by Albertsons and filed for bankruptcy. In the ensuing firesale, Albertsons ended up buying back many of its divested stores, and ultimately what remained of Haggen itself. 

Di Suvero is also concerned about how unique Alaska’s supply chain is, particularly its heavy dependence on a single port. Di Suvero and other opponents question if C&S has the expertise and wherewithal to step in and run its new grocery stores successfully.

So critics think C&S is setting itself up for failure, like Haggen?

Yes.

C&S isn’t a national player in the world of retail groceries. It owns the Piggly Wiggly brand and runs some Piggly Wiggly stores directly, but most are independently owned and operated under a franchise license. It also runs 11 Grand Union markets.

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But C&S is a big deal nationally in grocery wholesaling, supplying more than 7,500 supermarkets. Forbes says it’s an industry leader in supply chain innovation, the largest wholesale grocery supply company in the country and the eighth biggest privately held company in the country. So C&S is in a totally different league from Haggen. 

That said, the Federal Trade Commission says C&S doesn’t have its own store brand product lines, loyalty programs or e-commerce platforms it needs to successfully compete. 

Does Alaska figure prominently into the overall merger? 

No. 

Kroger and Albertsons combined have 36 stores in the state. That’s 11 Fred Meyers, and 24 Carrs or Safeways plus Crow Creek Mercantile in Girdwood. Across the country, they have about 5,000.

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And unlike in the Safeway-Carrs merger in 1999, the governor’s office has been hands off. Gov. Mike Dunleavy has not weighed in. The state Department of Law, which has its own consumer protection unit, says it’s monitoring the merger and the Federal Trade Commission’s legal fight to stop it. 

Outside of Alaska, eight states and the District of Columbia have joined the FTC’s lawsuit in federal court in Oregon.

And the attorneys general of Colorado and Washington have their own similar lawsuits. 

What happens if the merger gets shot down? 

There’s a lot invested in this merger. A reporter with WCPO in Cincinnati, where Kroger is headquartered, dug through financial filings and found that through March, the two parent companies had already spent $864 million in merger-related expenses. 

WCPO also found that Kroger had agreed to pay Albertsons $600 million if the merger fails. 

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So that’s a big incentive for Kroger to appeal if these legal fights don’t go its way. 

So what’s next?

The legal stuff. 

Hearings in the FTC case at the U.S. District Court of Oregon begin Aug. 26. This case is important, but won’t necessarily make or break the merger. The judge there is supposed to rule on whether or not to pause the merger, while more substantive arguments go before an administrative law judge in Washington, D.C. 

The trial in the Washington state court is scheduled to begin Sept. 16, and, separately, a Colorado state judge last month imposed his own order to pause the merger, pending a legal challenge there. That trial is scheduled to begin Sept. 30. 


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Jeremy Hsieh covers Anchorage with an emphasis on housing, homelessness, infrastructure and development. Reach him atjhsieh@alaskapublic.orgor 907-550-8428. Read more about Jeremyhere.





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Alaska

University of Alaska president reports $50M in grants frozen under Trump administration, warns of cuts to staff

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University of Alaska president reports M in grants frozen under Trump administration, warns of cuts to staff


Buildings on the campus of the University of Alaska Anchorage, photographed Tuesday, March 31, 2020. (Loren Holmes / ADN)

The administration of President Donald Trump has suspended and canceled more than $50 million in funding at the University of Alaska, university President Pat Pitney told the Board of Regents this month.

Pitney also warned regents at the board’s two-day meeting last week in Fairbanks that the statewide system faces the possibility of future staff cuts in programs that receive high levels of federal grants.

The statements came as the regents approved the coming fiscal year’s operating and capital budgets.

The operating budget’s $352 million in unrestricted general funds represents an increase from last year. But it does not keep pace with rising costs, Pitney told regents.

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Constrained state funding is also adding to pressure on the university, Pitney told the regents.

On the bright side, enrollment is growing with help from the Alaska Performance Scholarship and the university’s affordability, she said. (Alaska legislative leaders have recently approved a plan that could lead to a draw from the account that pays for those scholarships to help close a $200 million budget shortfall. The decision, and the budget bill, currently sits on the desk of Gov. Mike Dunleavy, who could potentially veto the item.)

“The Board has intentionally adopted a budgetary approach that balances fiscal restraint with specific investments in our university system, and that approach continues to yield positive results, including institutional stabilization and enrollment growth,” Board Chair Ralph Seekins said in a statement from the university.

“As the state budget environment contracts and uncertainty at the federal level remains, the board will continue working” with university leaders to maintain progress on student enrollment and success, he said.

Canceled and frozen grants

About $5.6 million worth of federal grants have been canceled, said Jonathon Taylor, a spokesperson for the university, in an interview last week.

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The cancellations include a $2.5 million grant over five years for the Alaska Native Science and Engineering Program, Matt Calhoun, the program‘s executive director, said in a notice.

The National Science Foundation grant is one of the program‘s largest grants, the notice said.

The cancellation was “unexpected and untimely” and required canceling the program‘s summer Acceleration Academy, he said. Five other summer programs remain in place, he said.

ANSEP will look for new funding sources to strengthen the academy in coming years, Calhoun said in the letter.

Another $50 million in federal grants is frozen, Pitney told regents.

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They include a $46 million, 10-year grant from the Department of Homeland Security for the Arctic Domain Awareness Center-ARCTIC Center of Excellence housed at the University of Alaska Anchorage, Taylor said.

In October 2015, Dr. Helena Wisniewski, then-executive director of the Arctic Domain Awareness Center, points out features of the Integrated Intelligent System of Systems for maritime situational awareness and response support in uncertain Arctic environments after a ribbon cutting ceremony in the ConocoPhillips Integrated Sciences Building at the University of Alaska Anchorage on Oct. 21, 2015. (Bill Roth / ADN archive)

Initial projects for the program include detecting emergency calls from mariners and researching renewable and nuclear energy options, the university said in a statement last year. New and existing academic programs were also planned through an interdisciplinary Arctic Security graduate degree and student fellowship program, the statement said.

Pitney told regents the program is in wait-and-see mode.

The university is working with the Department of Homeland Security to find a way to allow the grant to continue, Taylor said.

About $21 million in previously frozen federal grants for a variety of other programs has been reinstated, he said.

The university receives $270 million in federal funds annually, Pitney said. About $220 million of that is associated with research and academic grants. The rest is associated with student aid, Pitney told regents.

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“Everything in the rhetoric puts all that at risk,” she said, referring to language in presidential executive orders and agency notices. “That also has to go through a congressional process. It will go through court processes.”

“But we can kind of see the pressure coming,” she said. “I mean, we can clearly see the pressure coming. There’s no ‘kind of’ about it.”

‘Fewer employees’

The university works on 1,200 grant-funded programs supported largely by the federal government, often on multi-year timelines, Pitney said.

The university is fairly confident that the vast majority of those 1,200 grants will continue, she told regents.

“And so we have a runway as an institution up here,” she said.

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“It’s the 250 new grants every year we think is where we’re going to see the difference,” she said.

The number of new grants could fall to perhaps 200 or 100 annually, she said.

Pat Pitney, University of Alaska president, makes comments at UAA’s Health Sciences Building on May 19, 2022. (Marc Lester / ADN)

Also possible is that average award amounts might drop substantially, she said.

That would change the university workload.

Pitney said, “it would be nice to be able to report that we see no staffing changes in our horizon, but that’s just not practical. And I’d rather let people know that the expectation is changes are going to be happening.”

The changes, if needed, will be more concentrated in “highly leveraged units” that receive large amount of federal research money, such as the International Arctic Research Center at the University of Alaska Fairbanks, the Alaska Coastal Rainforest Center at the University of Alaska Southeast in Juneau, or the College of Health in Anchorage.

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“There will be fewer employees here next year than there are now” because of the federal cuts and pressure from state funding, Pitney said.

Staff with one program at the International Arctic Research Center, the Alaska Center for Climate Assessment and Policy, recently have raised concerns that the program’s existence is endangered by potential Trump administration cuts to scientific research.

[Trump administration cuts endanger critical science programs in Alaska, researchers say]

Despite the “noise in the federal environment,” the university in the coming fiscal year is looking at a “relatively modest” reduction of around $2 million to $3 million in indirect cost recovery associated with federal awards this coming fiscal year, Pitney told regents.

Indirect cost recovery provides reimbursement for university costs that are not directly related to research, such as lab equipment or administrative support.

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In a best-case scenario, funding levels in this area would be maintained, Pitney said.





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Major new Air Force training center in Alaska will help boost defense of North America

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Major new Air Force training center in Alaska will help boost defense of North America


An Air Force F-22 takes off from its home base at Joint Base Elmendorf-Richardson Tuesday, May 2, 2017 during the Northern Edge training exercise. On the tarmac are F-16s and F-15s. (Loren Holmes / Alaska Dispatch News)

Work will start this summer on a Pentagon “mega-project” in Alaska intended to boost the Air Force’s training capability to defend North America.

The 150,000-square-foot Joint Integrated Test and Training Center at Joint Base Elmendorf-Richardson in Anchorage will contain 426 computer servers kept running by a 15 million megavolt-ampere electric substation. The project is slated to be completed in 2029 at a cost of up to $500 million.

John Budnik, spokesman for the U.S. Army Corps of Engineers, said the center will allow trainers to sync personnel on the ground with pilots in the air.

“It’s the only place in the Indo-Pacific Command that can host multi-domain simulators for joint and coalition fighters, including F-35s, F-22s, F-15s, F-18s, next-generation fighters, bombers, command and control platforms, intelligence surveillance, reconnaissance aircraft, and long-range weapons fire,” he said.

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Thareth Casey, the program manager for the Army Corps of Engineers, said the training center is being designed so simulations can be adapted to include weapons and aircraft from other U.S. military branches, as well as NATO allies Canada, Finland, Sweden and others.

Air Force Col. Lisa Mabbutt, commander of the 673d Air Base Wing at Joint Base Elmendorf-Richardson, said the training center’s location underlines the importance of Alaska and the Arctic to the U.S.

“It demonstrates a commitment to Alaska as both a key power-projection platform and one of our nation’s leading edges of homeland defense,” Mabbutt said.

While the long, warmer days of summer have allowed military and commercial ships to take advantage of new sea lanes, the training center has to be built to withstand the seasonal flipside: winter, with its minus-20 temperatures and days where sunset comes a little over five hours after sunrise.

Casey, the project manager, said construction has its challenges.

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To keep the elements outside from impacting the work inside, the center will be built with a reinforced concrete foundation, steel-frame-insulated wall panels covered in masonry, and a steel-reinforced metal roof.

Construction will accelerate during the long, warmer summer days when the sun can be out for 20 hours. It will slow down during the cold, dark winters.

“It’s a one-of-a-kind project,” Casey said. “We’re constrained by the seasons but with planning, we expect to complete work by the fall of 2029.”

Despite a steady stream of reports about Russian and Chinese joint sea and air operations in the region, the U.S. commands that will be the primary users of the training center declined to specify which nations the training will focus on as possible aggressors.

A query to the 11th Air Force in Alaska was passed to Air Force headquarters at the Pentagon, which passed it to U.S. Indo-Pacific Command in Hawaii — which then passed it back to the 11th Air Force.

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But political and military officials have made it clear in earlier statements that the focus will be on training to react to potential threats from Russia and China.

Former Defense Secretary Lloyd Austin and top officers such as Air Force Gen. Anthony J. Cotton, head of Strategic Command, helped popularize the term “near-peer adversary,” a nation with a large military force approaching — it not reaching — equivalence with the United States. The term was most frequently shorthand for Russia. Cotton said in 2023 that Russia, which has about 5,900 nuclear warheads, was a “near peer adversary.”

The other term often used is “pacing challenge” — a country that is building up its military at a rapid rate. A 2023 Pentagon statement said the planned training center at Elmendorf-Richardson would allow “our warfighters to train against our pacing challenge in realistic threat scenarios.”

“China is the only country that can pose a systemic challenge to the United States in the sense of challenging us, economically, technologically, politically and militarily,” Colin Kahl, the Assistant Secretary of Defense for Policy, said in 2023.

Kahl said being a pacing challenge didn’t mean the U.S. had to go to war with China.

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“It does mean that we will have a more competitive and, at times, … adversarial relationship with Beijing,” he said.

Russia’s northern border is adjacent to the Arctic Ocean. From czars to Stalin to Putin, it has operated in the region for centuries.

China is a relative newcomer. Though 900 miles from the Arctic Circle, China in 2018 officially declared itself an “near-Arctic state” intent on becoming a “great polar power” by 2030.

In October 2024, a U.S. Coast Guard HC-130J long-range surveillance plane spotted Russian and Chinese ships operating together near the Bering Strait, the sea passage between Alaska and Russia that is just 55 miles wide at its closest point. Last year, American and Canadian fighters were scrambled to intercept Russian and Chinese long-range reconnaissance aircraft flying near the Alaska Air Defense Identification Zone (ADIZ), a U.S.-designated 150-mile buffer zone from U.S. territory.

Katherine Dahlstrand, a fellow at the Center for Strategic and Budgetary Assessments, a Washington, D.C., think tank, said Russia and China see the same military and commercial opportunities as the United States and its allies.

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“The Arctic is a new transit space for military assets,” Dahlstrand said. “The potential for shorter trade routes around the world using northern passages would be revolutionary for many countries,” she said. “It draws a lot of interest. The area also has energy resources, fishing, and mining.”

Dahlstrand said putting the training center in Alaska and practicing scenarios for defending the region is an investment that will pay off in the future.

“The Arctic spans the globe and is a connector of regions — European, Indo-Pacific, and North America,” Dahlstrand said. “For the United States, it’s also homeland security.”





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The Road to Patagonia review – an epic journey from Alaska to the Andes

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The Road to Patagonia review – an epic journey from Alaska to the Andes


Assembled from 16 years of footage, Matty Hannon’s feature debut embraces the possibility of the open road with full-hearted passion. His diaristic film documents his travels with the centrepiece being an astonishing journey from Alaska to Patagonia – first on motorbike, then on horse. Hannon’s zest for adventure first began as an undergraduate in ecology, when an encounter with a book on shamans in Indonesia urged him to move beyond the ivory tower of academia. He soon found himself in the Mentawai islands, living among the Salakirrat clan for five years; here, the Indigenous tribe see their surrounding environment as a living entity with inner spirits and souls.

As Hannon embarked on his years-long trip through the Americas, he brought this same sense of attention to the landscape, as it shifts from snow-capped mountain ranges to arid desert roads and stunning ocean waves. The cinematography glows with golden hues that bring to mind the bohemian spirit of 1970s counterculture films, an aesthetic accentuated by Daniel Norgren’s folksy soundtrack. Driven by an awe for natural beauty, the documentary also reveals its fragility, as new development in Chile and elsewhere threatens to drain rivers and wipe out whole forests.

When it comes to synthesising his experiences into social commentary, however, Hannon’s narration betrays certain levels of naivety. In emphasising the importance of sustainability, he often reinforces superficial binary oppositions about eastern and western ways of life. In reality, issues such as consumerism, environmental extraction and rapid industrialisation have always existed on a global scale. In contrast to Hannon’s musings, interviews with local figures provide valuable insights, which rescue the film from being politically and intellectually adrift.

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The Road to Patagonia is on the Icon film channel from 30 May, and in UK cinemas from 27 June.



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