US authorities stop the merger of two large supermarket chains

The Federal Trade Commission USA This Monday, it stopped the merger of two large supermarket chains in the country, Kroger and Albertsons, an operation valued at almost US$ 25,000 million, due to its potential effect of increasing the price of products.

The regulatory agency (FTC) filed a lawsuit in Oregon state court and noted that the “Mega meltdown comes as American consumers have seen the cost of food rise consistently in recent years.””, according to a press release.

Kroger, which is the first supermarket chain by sales in the US, announced in October last year an agreement to acquire its rival Albertsons, which is the second by sales, to face competition from other large chains such as Walmart, Amazon and Costco.

“Kroger’s purchase of Albertsons would lead to additional price increases on everyday grocery goods, further exacerbating the financial pressure consumers across the country face today.”said the director of the FTC’s competitiveness office, Henry Liu, in the note.

He also argued that the operation would harm the salaries of the workers of these companies, which employ some 710,000 people and own almost 5,000 commercial spaces.

Before the FTC lawsuit, the Attorney General’s Offices of Washington and Colorado had already tried to stop the merger, and a bipartisan group of nine other prosecutors, including those from California, Arizona and New Mexico, have joined the case filed by the federal agency. .

The brake on the merger was not welcomed by Kroger or Albertsons: the first said that the FTC’s action will be what makes the products more expensive, not them, and the second accused the agency of having a “outdated vision” of the food sector.

Previously, to resolve concerns about competition, Kroger had already committed to selling more than 400 stores and other assets, but the agency considered it an offer “insufficient” and came to describe it as a “hodgepodge” no “will mitigate the loss of competition.”

In their October announcement, the two chains indicated their intention to undertake a price reduction and to that end they estimated that the synergies would allow them to save about US$500 million in costs. Kroger dropped a 1.7% on the stock market and Albertsons rose a 0.5% after hearing the news.