{"id":37053,"date":"2022-11-29T17:05:49","date_gmt":"2022-11-30T00:05:49","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/u-s-lawmakers-skeptical-grocery-merger-will-mean-lower-prices\/"},"modified":"2022-11-30T00:05:49","modified_gmt":"2022-11-30T00:05:49","slug":"u-s-lawmakers-skeptical-grocery-merger-will-mean-lower-prices","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/u-s-lawmakers-skeptical-grocery-merger-will-mean-lower-prices\/","title":{"rendered":"U.S. lawmakers skeptical grocery merger will mean lower prices"},"content":{"rendered":"

\"Vivek
Vivek Sankaran, CEO at Albertson\u2019s Cos., speaks during a Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights hearing on the proposed Kroger-Albertsons grocery store merger, at the Capitol on Tuesday. (Mariam Zuhaib\/The Associated Press)<\/span>Mariam Zuhaib<\/span><\/figcaption><\/figure>\n<\/p>\n

U.S. senators from both parties expressed skepticism Tuesday that a proposed merger between grocery giants Kroger and Albertsons would result in lower prices for consumers.<\/p>\n

\u201cFewer local options mean less competition to keep prices low,\u201d said Sen. Alex Padilla, a California Democrat, in a hearing before the antitrust subcommittee of the Senate Judiciary Committee. Padilla said Kroger and Albertsons compete in many California cities.<\/p>\n

But the CEOs of Kroger and Albertsons insisted there will still be competition, and said a merger will help them counter growing rivals like Walmart, Costco and Amazon.<\/p>\n

Kroger CEO Rodney McMullen said the days of shoppers buying all their groceries at one store once a week are gone. Shoppers often get their groceries at five or six different locations, he said.<\/p>\n

\u201cI just don\u2019t see less competition going forward,\u201d McMullen said. \u201cIt\u2019s easy for customers to take a left turn or a right turn.\u201d<\/p>\n

Kroger announced its plan to acquire Albertsons for $20 billion in mid-October. Together, the companies would control about 13% of the U.S. grocery market. If it\u2019s approved by U.S. antitrust regulators, the deal is expected to close in early 2024.<\/p>\n

Sen. Mike Lee, a Utah Republican, noted the subcommittee would have little say in whether the merger will go through. That will be a decision for the Federal Trade Commission and the Justice Department. But he said the hearing was an important opportunity for the public to understand a merger that could impact their lives.<\/p>\n

Lee needled Kroger for approving a $1 billion stock buyback last year even as food prices were jumping for consumers. Lee said U.S. households paid an average of $110 more for food in October than they did a year ago.<\/p>\n

\u201cIf Kroger wasn\u2019t passing on savings to consumers when it was competing with Albertsons, then why would we think it would pass on savings after it eliminates competition?\u201d he said.<\/p>\n

But McMullen said Kroger has lowered prices after other mergers, like its 2013 acquisition of Harris Teeter.<\/p>\n

\u201cFrom a business standpoint, that is our commitment,\u201d he said.<\/p>\n

McMullen reiterated Kroger\u2019s plan to spend $500 million reducing prices, $1.3 billion updating Albertsons stores and $1 billion on higher employee wages and improved benefits if the merger goes through.<\/p>\n

Sen. Amy Klobuchar, a Minnesota Democrat, asked about the time frame for that spending and wondered who would make sure the company met its commitments. McMullen said those investments would be spread over four years.<\/p>\n

Others peppered the companies with questions about potential store closures or employee layoffs. Kroger and Albertsons have said they will sell or spin off up to 375 Albertsons stores in markets where they currently compete.<\/p>\n

\u201cThe intent is not to close stores. The intent is to divest stores,\u201d Albertsons President and CEO Vivek Sankaran said.<\/p>\n

But that didn\u2019t ease lawmakers\u2019 concerns. Several noted that when Albertsons acquired Safeway in 2015 for $9.2 billion, the FTC required it to divest 168 stores. The largest buyer of those stores filed for bankruptcy protection nine months later and Albertsons wound up buying back some of the locations.<\/p>\n

\u201cWhen divested assets head into bankruptcy in less than a year, that remedy is an embarrassing failure,\u201d Lee said.<\/p>\n

Sankaran said the FTC approved the buyer in that merger. This time, he said, Albertsons \u2013 pending the FTC\u2019s approval \u2013 may spin off stores into a separate company that would be led by experienced leaders.<\/p>\n

Colorado Attorney General Phil Weiser said in a statement to Colorado Newsline that his office\u2019s need to review mergers threatening to Colorado consumers is a responsibility he takes seriously.<\/p>\n

\u201cAt a time of rising food prices, the possibility of undue consolidation in the grocery business raises serious concerns particularly since King Soopers and Safeway have a large footprint in Colorado,\u201d Weiser said in a statement. \u201cMy department and I will closely review the proposed merger between Kroger and Albertsons to ensure it does not harm consumers or workers.\u201d<\/p>\n

Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands like Ralphs, Smith\u2019s and Harris Teeter. Alberstons, based in Boise, Idaho, operates 2,273 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw\u2019s. Together the companies employ around 710,000 people.<\/p>\n

Federal lawmakers aren\u2019t the only ones scrutinizing the merger plan. Earlier this month, a bipartisan group of state attorneys general sued<\/a> to block Albertsons from paying a $4 billion dividend to its shareholders until they have reviewed the merger.<\/p>\n

That payout is temporarily on hold<\/a> after a state judge in Washington said he needed more time to consider the matter.<\/p>\n

\"Michael
Michael Needler, CEO of grocery retailer Fresh Encounter Inc., speaks during a Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights hearing on the proposed Kroger-Albertsons grocery store merger, at the Capitol on Tuesday. (Mariam Zuhaib\/The Associated Press)<\/span>Mariam Zuhaib<\/span><\/figcaption><\/figure>\n
\"Vivek
Vivek Sankaran CEO at Albertsons Companies, speaks during a Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights hearing on the proposed Kroger-Albertsons grocery store merger, at the Capitol on Tuesday. (Mariam Zuhaib\/The Associated Press)<\/span>Mariam Zuhaib<\/span><\/figcaption><\/figure>\n
\"Kroger
Kroger CEO William Rodney McMullen speaks during a Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights hearing on the proposed Kroger-Albertsons grocery store merger, at the Capitol in Washington, Tuesday, Nov. 29, 2022. (Mariam Zuhaib\/The Associated Press)<\/span>Mariam Zuhaib<\/span><\/figcaption><\/figure>\n
\"Sen.
Sen. Mike Lee, R-Utah., questions witnesses during a Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights hearing on the proposed Kroger-Albertsons grocery store merger, at the Capitol on Tuesday. (Mariam Zuhaib\/The Associated Press)<\/span>Mariam Zuhaib<\/span><\/figcaption><\/figure>\n<\/p>","protected":false},"excerpt":{"rendered":"

\u2018Fewer local options mean less competition,\u2019 senator says<\/p>\n","protected":false},"author":1,"featured_media":37054,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[431],"naviga_topic":[],"class_list":["post-37053","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-business-general"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/37053","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=37053"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/37053\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/37054"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=37053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=37053"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=37053"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=37053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}