Judges block Albertsons-Kroger Merger

A federal judge in Oregon has temporarily blocked the merger between two of the largest grocery chains in the U.S., Kroger and Albertsons.

The $24.7 Billion merger was at the center of a three-week trial that began in Portland in August. U.S. District Court Judge Adrienne Nelson issued a preliminary injunction against the deal on Tuesday afternoon.

“Although the defendants may choose to abandon the merger due to this preliminary injunction, this order does not compel them to do so, leaving open the possibility that they could pursue the merger again if it is deemed lawful in future administrative proceedings,” Nelson wrote.

Kroger, based in Ohio, operates 2,800 stores in 35 states, while Albertsons, based in Idaho, runs 2,220 stores in 34 states. The companies initially proposed the acquisition in October 2022, claiming it would strengthen their ability to compete with major retailers like Amazon and Walmart.

In February, Oregon joined other states in supporting the FTC’s lawsuit aimed at blocking the merger. The FTC argued that the deal would reduce competition and lead to higher food prices for consumers.

Kroger announced plans to sell 579 stores to C&S Wholesale Grocers as part of the merger. 186 of those stores are located in Oregon and Washington. Despite Kroger’s claim that C&S would not close any stores and that workers would keep their jobs, critics, including Oregon Senator Ron Wyden, warned that the merger could hurt consumers and workers.

Senator Wyden supported Judge Nelson’s ruling in a recent statement, saying, “I’m glad the court has shelved this monster deal because in addition to raising grocery prices for shoppers already on an economic tightrope, it would have made it harder for Oregonians to find a pharmacy and for workers at both supermarket chains to seek fairer wages and better working conditions.”

In response, several local unions within the United Food and Commercial Workers’ Stop the Merger coalition urged Kroger and Albertsons to reinvest in their stores rather than pursue the merger.

The injunction remains in place while the Federal Trade Commission continues its administrative proceedings on the matter.