State Attorneys General are Right to Fight Private Equity’s Kroger-Albertsons Scheme
Washington, D.C. — The American Economic Liberties Project released the following statement in response to federal lawsuits filed by District of Columbia Attorney General Karl Racine, which was joined by Illinois Attorney General Kwame Raoul and California Attorney General Rob Bonta, and a state lawsuit filed by Washington State Attorney General Bob Ferguson that ask courts to stop Albertsons from paying a $4 billion special dividend to its shareholder — which are majority private equity firms — ahead of a proposed merger with Krogers.
“Private equity firms are trying to loot Albertsons ahead of a clearly anticompetitive merger with Kroger, rendering it unable to effectively compete while the merger is reviewed. Attorneys General Racine, Ferguson, Bonta, and Raoul have done the right thing by asking courts to block this scheme,” said Pat Garofalo, Director of State and Local Policy at the American Economic Liberties Project. “A Kroger-Albertsons merger would be devastating for consumers, workers, and independent retailers — which Washington State is uniquely familiar with, as it was harmed substantially by Albertsons 2015 merger with Safeway. By filing cases under both state and federal law, respectively, Ferguson and Racine are showing that state enforcers have ample powers to fight corporate consolidation and protect local communities.”
A Kroger-Albertson’s merger would send food prices soaring even higher as working families already struggle to make ends meet. According to the Bureau of Labor Statistics, the price of food eaten at home has skyrocketed 13% in the last year, with a 30.5% price increase for eggs17.2% for chicken, and 14.7% for bread, among other staple foodstuffs.
As Ferguson’s suit notes, consolidation in the grocery sector has long been an issue — one that has previously been mismanaged by antitrust enforcers. In 2015, Albertsons sought to acquire competitor Safeway for $9.4 billion. Of the more than 2,400 grocery stores that Albertsons and Safeway owned in total, the FTC required the sale of 168 of them located in eight Western states. That divesture was a disaster. Within a year, Alberton’s had bought back 33 of the stores for about one-fifth of what it had sold them for, and communities across these states ultimately ended up with a monopoly.
The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.