Colorado Attorney General Phil Weiser will file a lawsuit to block the proposed $24.6 billion merger of Kroger and Albertsons, the state’s two largest grocery store chains.
According to The Denver Post, Weiser is joining Washington Attorney General Bob Ferguson in opposing the merger, which both officials claim would stifle competition and harm consumers, workers, and suppliers alike.
“Coloradans are concerned about undue consolidation and its harmful impacts on consumers, workers, and suppliers,” said Weiser in a press release.
“A post-merger Kroger would have the ability to raise prices, pinching consumers. In urban areas, where consumers shop close to home, the consolidation of Kroger and Albertsons stores would create significant market power to raise prices and reduce quality and services. Consumers in other areas of the state would feel the effects even more,” Weiser said.
Kroger, adds the Post, owns and operates about 148 stores in Colorado, including those run under the King Soopers and City Market brands. Albertsons, meanwhiles, has a combined total of 105 Safeway and Albertsons stores statewide.
Weiser has since said that he filed his lawsuit after holding listening sessions across the state and reviewing thousands of responses to an online survey.
A 2011 image of Washington Attorney General Bob Ferguson, who was, at the time, campaigning for the post. Image via Wikimedia Commons/user:Joe Mabel. (CCA-BY-3.0). (https://commons.wikimedia.org/wiki/File:Bob_Ferguson_04.jpg).
“After 19 town halls across the state, I am convinced that Coloradans think this merger between the two supermarket chains would lead to stores closing, higher prices, fewer jobs, worse customer service, and less resilient supply chains,” Weiser said.
The state’s claim against Kroger and Albertsons also targets a so-called “no-poach agreement.”
The agreement, Weiser said, was proposed in emails between both companies’ executives, in which Albertsons agreed not to hire any King Soopers employees or solicit King Soopers pharmacy customers during a 2022 strike against King Soopers.
“King Soopers was concerned about losing employees and customers to Safeway during the strike and entered into an agreement with Albertsons whereby Safeway agreed to not hire any King Soopers employees and to not solicit any of King Soopers’ pharmacy customers, according to an email between company executives leading up to the strike,” Weiser’s office said. “Such no-poach and non-solicitation agreements are illegal under the Colorado State Antitrust Act because they are agreements to not compete.”
Weiser claims that these sorts of agreements, even when informal, are illegal under the Colorado Antitrust Act.
As LegalReader.com has reported before, Washington Attorney General Bob Ferguson has made similar allegations concerning the merger’s purportedly anticompetitive implications. In his own statement, released in January, Ferguson noted that “even company executives have expressed that the merger might be illegal.”
“After rumors of the proposed merger surfaced,” Ferguson said, “a vice president with Albertsons wrote that ‘you are basically creating a monopoly in grocery with the merger … [it] makes no sense.’”
Sources
Colorado Attorney General announces lawsuit to block Kroger, Albertsons merger
Colorado attorney general sues to block Kroger-Albertsons merger
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