WASHINGTON (dpa-AFX) - Colorado Attorney General Phil Weiser filed a lawsuit on, Wednesday, February 14 to stop the $24.6 billion merger between The Kroger Co. (KR) and Albertsons Companies, Inc. (ACI), expressing concerns about potential harm to consumers.
Weiser warned that the merger, which was announced in 2022, might lead to store closures, higher prices, job cuts, reduced customer service, and weaker supply chains.
Additionally, Colorado is disputing the no-poach and non-solicitation agreements between Kroger and Albertsons, aiming for civil penalties and injunctive relief. Weiser alleged that the no-poach agreement barred the companies from hiring each other's employees, while the non-solicitation agreement prevented them from targeting each other's pharmacy customers, both of which are said to violate antitrust laws. The lawsuit also seeks to enforce $1 million in civil penalties connected to the no-poach agreement.
Weiser's office raised concerns about reduced competition and the insufficiency of the proposed divestiture, underlining possible negative effects on consumers, employees, and the food supply industry as a whole.
Kroger owns King Soopers and Albertsons owns Safeway, making the two companies collectively responsible for over half of Colorado's grocery stores.
Weiser expressed concerns about a previous merger when Albertsons purchased Safeway, Inc. He stated that the merger led to store closures, job cuts, reduced consumer options, and decreased competition.
Local 7, a union representing 18,000 employees at Kroger and Albertsons stores in Colorado and Wyoming, backs the legal action and is against the merger. The union's president condemned the merger as motivated by greed and seeking to centralize power in an industry that is already highly concentrated, with a few companies dominating much of the food market.
The lawsuit, filed in Denver District Court, represents the second state challenge to the Kroger-Albertsons merger, following a similar lawsuit by Washington state in January.
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