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Nevada joins federal lawsuit to block Kroger-Albertsons merger

The $24.6 billion deal between major grocery chains would stifle competition, increase prices and harm workers, according to documents filed in district court.
Eric Neugeboren
Eric Neugeboren
EconomyGovernmentState Government

Nevada has joined a lawsuit filed by the Federal Trade Commission (FTC) and seven other states to block the proposed merger of major grocery store chains Kroger and Albertsons over its impact on consumers and employees.

The lawsuit, filed Monday in the U.S. District Court in Oregon, said the proposed $24.6 billion merger would increase grocery prices, stifle competition and harm workers by decreasing their leverage while negotiating for fair pay and benefits.

There are more than 90 Kroger and Albertsons stores or affiliates in Nevada, mostly in the Las Vegas area. Kroger owns Smith’s, while Albertsons is the parent company of Safeway and Vons stores. Many Nevada-based Kroger and Albertsons stores are near each other.

Nevada Attorney General Aaron Ford has been looking into the consumer effects and legality of the merger for several months. Last year, the Democrat held a series of events across the state to gauge residents’ thoughts on the merger, where several Nevadans expressed concerns over the merger’s potential impact on prices.

“This merger would create an anticompetitive marketplace, raise prices on everyday Nevadans and harm grocery store employees,” Ford said in a statement Monday. “As anyone who does the shopping for their family knows, grocery prices have climbed high in recent years. Nevadans don’t deserve for those prices to climb any higher." 

In Nevada, there are 31 Kroger stores that are within 2 miles of an Albertsons or Vons branch, according to a prior Nevada Independent analysis. Some Kroger stores are within 2 miles of multiple Albertsons or Vons locations, the analysis found.

One of those Kroger stores is located in a ZIP code where 21 percent of residents are facing food insecurity, the fourth-highest rate in Southern Nevada, according to data from Three Square, an organization combating food insecurity.

Kroger and Albertsons said the merger is necessary to fend off industry behemoth Walmart, which had a quarter of the nation’s market share in 2022. The companies have also committed to spend hundreds of millions of dollars to increase wages and ensure lower prices.

In separate statements Monday, Kroger and Albertsons said that the deal would increase competition and limit prices. 

“The FTC’s decision makes it more likely that America’s consumers will see higher food prices and fewer grocery stores at a time when communities across the country are already facing high inflation and food deserts,” Kroger’s statement read. 

Sen. Jacky Rosen (D-NV), who asked the FTC in December to consider blocking the merger, said in a statement on Monday that she was “glad to see the FTC take steps at my urging to block this mega merger and protect families from even higher prices.”

The two companies said in October that they would retain ownership of most of their nearly 5,000 combined stores but would sell 413 stores — including 15 in Nevada — to the third party C&S Wholesale Grocers, an effort to maintain competition and fend off state and federal regulators. C&S is primarily a supplier for grocery stores, but it does own and operate several grocery brands including Piggly Wiggly.

Monday’s lawsuit argued that this plan was inadequate.

“Kroger and Albertsons’s inadequate divestiture proposal is a hodgepodge of unconnected stores, banners, brands, and other assets that Kroger’s antitrust lawyers have cobbled together and falls far short of mitigating the lost competition between Kroger and Albertsons,” an FTC release said. 

The complaint additionally alleges that the merger would eliminate head-to-head competition between the stores, which has historically led to lower prices for consumers. 

In addition, the two companies frequently compete against each other for workers, the FTC said. A merger would decrease the leverage that workers and unions have over the industry giants.

Despite the companies maintaining that no stores would close as a result of the merger, Nevadans who spoke to Ford during the office’s listening sessions last year were worried that the deal would exacerbate food deserts, areas where people have minimal access to grocery stores.

This story was updated on 2/26/24 at 2:50 p.m. to include a statement from Sen. Jacky Rosen.


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