Federal court in Oregon blocks grocery merger affecting Alaska food outlets

A federal judge has blocked the proposed $25 billion merger between Kroger and Albertsons, two major grocery chains that own food stores in Alaska, Fred Meyer stores in the case of Kroger and Safeway stores in the case of Albertsons. The decision was announced Tuesday, Dec. 10.

If the merger were to have happened, Safeway stores in Alaska would have been sold off, risking a lessening of competition in the state including in the Palmer-Wasilla area where stores would have been sold or closed.

Accountable.US, a consumer watchdog group, said the decision was a victory to American consumers, although it is likely to be appealed. The proposed merger would have opened the door for further consolidation, reduced wages for workers, and increased likely price gouging in the food industry, the group said.

“American families are the big winner today, thanks to the Federal Trade Commission,” which brought the federal lawsuit,” said Liz Zelnick, spokesperson for Accountable US.

“The only people who stood to gain from the potential merger between Albertsons and Kroger were their wealthy executives. The rest of us are letting out a huge sigh of relief knowing today’s victory is good news for competitive prices and consumer access.”

The lawsuit was originally filed in February in the federal court in Oregon by the FTC. For the last three weeks, the FTC argued in Portland that the merger would eliminate competition between the two grocery chains, leading to even higher prices for shoppers and reduced bargaining leverage for unionized workers’ ability to negotiate higher wages, better benefits, and improved working conditions.

Mary Peltola, Alaska’s U.S. Representative in Congress, had been fighting hard against the merger and said the result is, “exactly what I, alongside countless Alaskans, have been fighting for. I told Alaskans I would do everything in my power to stop this life-altering merger–and now we have results. A blocked merger means protecting produce on our shelves, good-paying jobs in our communities, and preservation of our way of life,” Representative Peltola said in a statement.

Following the news that Albertsons has backed out of the $24.6 billion merger, Senators Lisa Murkowski and Dan Sullivan released the following statements:

"I have been working with the delegation for over a year to amplify the justified concerns Alaskans have about this merger, and I’m pleased that the courts have now recognized what we knew, that it would have imposed significant harms on Alaskans. That Albertsons has now backed out is evidence that this was a bad idea from the start,” Senator Murkowski said. “Today marks a victory for Alaskans seeking affordable and accessible groceries for their families.”

“I appreciate the court’s decision to block this merger,” said Senator Sullivan. “Many Alaskans were concerned about this merger resulting in grocery store closures and higher prices in Alaska, especially as our state already faces some of the highest prices for food and basic goods in the country. Senator Murkowski and I demanded the FTC conduct a rigorous analysis to ensure that Alaskans would not be negatively impacted by this merger. The FTC found that the merger would likely reduce competition and raise prices—putting further strain on working families in our state. The courts agreed, which is good news for our state.”

Under the merger, Kroger had announced a $1.9 billion divesture agreement, which proposed selling 14 of 35 existing Carrs-Safeway stores in Alaska owned by Albertsons to C&S Wholesale, LLC. The stores up for sale are located in Anchorage, Girdwood, Fairbanks, Eagle River, Palmer, Wasilla, Juneau, Kenai, Soldotna, and the North Pole, according to the proposed divestiture list.