The FTC Waves Off the Consumer Benefits of the Kroger-Albertsons Deal

September 18, 2024

On Tuesday, the Federal Trade Commission, under the direction of Chair Lina Khan, argued its case to block the merger between grocery chains Kroger and Albertsons before Judge Adrienne Nelson in a federal court in Portland.

This merger would create a grocery chain smaller than Walmart and Costco. It is to better compete with these very grocery giants that Kroger and Albertsons sought this merger in this first place. And yet the FTC complaint excludes Whole Foods, Sam’s Club, Costco, Amazon, and Aldi as competitors in the “traditional supermarket” sector, neatly isolating the Kroger-Albertsons deal to highlight it as anticompetitive.

This narrowing of the competitive market ignores how Americans shop today and the plain realities of the grocery business. Nate Scherer of the nonprofit American Consumers Institute demonstrates that the extent to which this lawsuit is a triumph of ideology over common sense and the plain interest of consumers and workers.

Scherer reports that:

• Kroger has pledged to invest $1 billion toward cutting grocery prices for consumers.

• The merger will result in a $1.3 billion investment to improve the customer experience.

• Kroger has promised, if the deal goes through, to spend $1 billion on employee wages and benefits for 640,000 workers.

These pledges, which once would have satisfied regulators, are ignored by today’s FTC. By sweeping aside all economic evidence and logic, Biden-Harris antitrust regulators are moving beyond a liberal interpretation of antitrust to mount progressive show trials of American capitalism. Their intention is not to improve capitalism by removing choke points on competition. Their intention to discredit capitalism altogether as hopelessly compromised by a tendency toward monopoly, and then to regulate businesses so heavily that we will effectively have a government-managed Department of Groceries, a Department of Airlines, a Department of Tech, etc., with the regulators in Washington, D.C., standing at the commanding heights of the world’s largest economy.

These radical regulators can only harm consumers, reduce competition, and hurt consumers and workers alike.