Rep. Jayapal: Kroger merger will ‘hurt consumers, workers’

Nov 21, 2022, 11:41 AM

jayapal corporate...

Congressional Progressive Caucus Chair Rep. Pramila Jayapal, D-Wash., speaks during a news conference. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

(Tom Williams/CQ-Roll Call, Inc via Getty Images)

U.S. Representative Pramila Jayapal (WA-07) is calling for a Federal Trade Commission (FTC) investigation into Kroger’s proposed acquisition of Albertsons.

It would combine the country’s two largest grocery store chains under one name. Kroger currently owns Fred Meyer and QFC, while Albertsons operates Safeway and Haggen.

WA fears grocery merger monopoly as inflation worsens

The two grocery giants agreed to merge back in October, saying they expect about $500,000 in cost savings and will reinvest that money into reducing prices on the shelves and allowing them to be more competitive with companies like Walmart and Amazon.

“This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors,” Rodney McMullen, Kroger Chairman and CEO, said in a statement following the merger announcement.

Representative Jayapal disagrees and says the merger wouldn’t be good for the average American.

“The acquisition would threaten competition and hurt consumers, workers, and small businesses. It presents several anti-competitive concerns, including fewer product choices and higher costs,” Jayapal said in a statement.

The lawmaker says it raises “anti-competitive” concerns and wants the FTC to investigate before the acquisition is complete.

The Food at Home Index, an approximate evaluation of grocery store costs, reported an increase in food prices by 0.7% in September and a stunning 13% over the last year, according to the Consumer Price Index.

According to the Census Bureau’s Household Pulse Survey done in January, as many as 42 million Americans said they could not afford to buy enough food.

“Honestly, there would not be that many affordable options in the area,” another man told KIRO Newsradio during his lunch break. “I mean, most people, their houses, they have maybe one or two grocery stores within walking distance.”

He also worries the merger could create a monopoly on goods and allow the newly-formed company to increase prices exponentially.

“I do know that mergers tend to raise prices in general, so that’s why I’m extremely wary of it and also, I’m wary anytime choices go down,” he continued.

The merger creates a company encompassing nearly 5,000 stores, reaching approximately 85 million households across the U.S. Kroger would own a share of the U.S. grocery market second to only Walmart.

A King County Court Commissioner approved a temporary restraining order request filed by Washington state Attorney General Bob Ferguson to block Albertsons Inc. from paying a massive dividend to investors Monday, Nov. 7.

If the dividend went through on that date, it would come before federal and state regulators review the company’s proposed merger with Kroger Inc. The two grocery giants agreed to merge over a $20 billion deal — which would allow grocery store Kroger to acquire Albertsons and allow Albertsons to pay out shareholders $4 billion in dividends.

The union representing Kroger workers, UFCW 3000, joins Jayapal in protesting the deal.

Jayapal, union leaders, and activists are set to hold a press conference Monday at noon in Seattle’s Junction Park.

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Rep. Jayapal: Kroger merger will ‘hurt consumers, workers’