Opinion: FTC and Colorado AG should take bold step to stop the Kroger-Albertsons merger

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Early last year, we saw more than 8,000 King Soopers grocery store workers across Colorado go on strike to get a better deal. They were fed up with low wages and poor working conditions in the face of rising profits for their employer during the pandemic.

Reflecting a shared and growing understanding among consumers, workers and small businesses that large corporations have too much power and money in our economy, Coloradans joined in solidarity with King Soopers workers, refusing to cross the picket line until a deal got done. After nine days, the company and the union announced a new collective bargaining agreement with modest wage increases and improvements to working conditions.

In that case, it was the solidarity of workers, consumers, people and communities that finally brought King Soopers to the table. The company knew that if the workers didn’t get a fair shake in bargaining, they could go get a better deal somewhere else. And when the workers went on strike, shoppers moved their business elsewhere rather than crossing the picket line. 

But what would have happened if there hadn’t been another employer to work for or bargain with and another grocery store to sell us food during the strike? King Soopers would have known that eventually the workers would have to come back and consumers would return, and the company wouldn’t have felt much pressure to sit down and get a deal done. Without more options, worker solidarity and community solidarity with workers wouldn’t have been nearly as effective.

Now, because of a proposed merger between national grocery giants Kroger (King Soopers’ parent company) and Albertsons (also the parent company of Safeway), workers, consumers and small businesses face this threat. If approved by antitrust regulators, the merger would mean that thousands of grocery store workers, butchers, bakers, pharmacists and others across Colorado — especially in rural Colorado where there are fewer employment options — would be effectively stripped of one of the foundations of their bargaining power: the opportunity to work elsewhere in the face of poor working conditions. A powerful new report demonstrates how the merger would suppress worker bargaining power and wages. And many Coloradans will be left with just one grocery corporation in their community to shop from. In Colorado, Kroger operates about 150 stores while Albertsons has 105 under the Albertsons and Safeway brands.

The Federal Trade Commission and Colorado Attorney General Phil Weiser may have something to say about this merger. 

For his part — understanding that the harm of mergers isn’t just reflected in wonky economic data — Weiser has engaged in an unprecedented listening tour of Colorado to hear directly from workers, consumers, small growers and others about how the merger will affect them. And on November 1, FTC Chair Lina Kahn joined Weiser in Denver for one of several listening sessions. They heard from dozens of people who shared their fears of rising grocery prices, stagnating wages and the challenges they face in taking on corporate power — challenges that will only be exacerbated by the proposed merger.

Kahn and Weiser’s task isn’t an easy one. For decades, regulators in D.C. and across the country have mostly rubber-stamped mergers in the face of corporate pressure. 

Kroger and Albertsons are pulling out the same playbook to get their deal through. 

Albertsons’ private-equity owners have already cashed out on the merger in the form of a $4 billion payout, and now it’s arguing that it can ease the harms of the merger by selling off a small percentage of its stores to a third-party company, in this case the wholesaler C&S. In the past, this strategy, known as divestment, has been used to justify mergers that have only caused prices to go up and wages to go down. 

In other words, as opposed to policing abuses of corporate power, antitrust regulators have too often enabled them. That’s the precedent Weiser and Kahn and the communities fighting against this merger are up against.

At the end of the listening session, Kahn reminded the audience that ultimately, the most the FTC can do is challenge the merger in court. Attorneys general like Weiser can’t do any more than that either. This means that it may be judges who have the ultimate say. To be sure, there’s the chance a court would allow the merger to go through. But that’s not a reason not to try, especially when the evidence weighs so strongly against the merger. If the merger were allowed to go through, more than 55% of the retail food market would be controlled by two corporations, Wal-Mart and Kroger-Albertsons. 

Corporations have far too much power in our economy and democracy, but the King Soopers strike showed us that the countervailing power of workers, consumers and small businesses can still make a difference. Corporate consolidation like the King Soopers merger threatens to cut off that countervailing power at the knees.

Antitrust laws have been perverted by corporations to help build corporate power, but that’s not their original design. They should be there to help police the market from corporate abuse. The FTC and attorneys general offices across the country should show the courage and boldness to do just that.

David Seligman is the executive director of Denver-based Towards Justice. He litigates cases across the country on behalf of workers and consumers challenging abuses of corporate power, including under the antitrust laws.

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