By Jody Godoy
(Reuters) – The case in which U.S. antitrust authorities argued their case to block Kroger's $25 billion bid for rival Albertsons is set to wrap up on Tuesday, but legal proceedings over the deal have only just begun. Two more lawsuits are scheduled to go to trial this month to address complaints about the merger potentially increasing grocery bills.
Over the past three weeks, the U.S. Federal Trade Commission and a coalition of states have been trying to prove in a lawsuit in Portland, Oregon, that the deal would harm consumers and grocery store union members.
By the time that case wraps up Tuesday, the companies will be on day two of another trial in Seattle, where the Washington state attorney general is challenging the deal. Beginning Sept. 30, a judge in Denver will hear Colorado’s arguments to stop the deal.
“It's a significant cost increase, it pushes back the timeline and it's an unwanted additional set of hurdles” for the companies, said William Kovacic, a professor of antimonopoly law at George Washington University.
Kroger and Albertsons have spent $864 million this year on merger costs and are opposed to all three cases. Kroger says the merger will result in lower prices and higher wages.
“Only global, non-union giants like Walmart, Amazon and Costco will benefit from blocking this deal,” the company said in a statement.
In Washington state, where Attorney General Bob Ferguson appeared in court Monday to block the deal, half of all grocery sales go through one of the two chains and 124 stores will switch to C&S if the merger goes through.
In addition to claiming that the deal will raise prices and limit consumer choice, Ferguson also argues that it will make it easier for Kroger to close stores where workers are unionized and reopen them as non-union stores.
“We look forward to representing the interests of Washington residents in Washington state court,” Ferguson said in a statement.
Colorado has also filed a lawsuit to block the merger over objections from customers, employees and local farmers who supply both chains.
“Colorado values local food. And that's one area where these two companies are competing. It's important to farmers,” Attorney General Phil Weiser said in a recent interview.
During the Oregon trial, which began Aug. 26, the FTC and a coalition of eight states plus Washington, D.C., called supermarket executives, labor leaders and economists to testify. They sought to show that the deal would likely lead to higher prices and weaken workers’ bargaining power by eliminating direct competition between the two chains.
The two supermarkets wanted to demonstrate that the deal was necessary to lower prices at Albertsons stores and allow both chains to compete with Walmart.
Kroger has said no stores will be closed as a result of the merger. But that would not prevent future store closures or consolidations.
(Reporting by Jody Godoy in New York, additional reporting by Deborah Bloom in Portland, Oregon; Editing by David Gregorio)
