Grocery consumers sue to block Kroger’s $25 billion buy of Albertsons
Send a link to a friend
[February 04, 2023] By
Mike Scarcella
(Reuters) - A private lawsuit filed in California on Thursday seeks to
stop Kroger Co's planned $25 billion purchase of rival Albertsons
Companies Inc, a deal that state attorneys general, consumer groups and
some U.S. lawmakers have questioned as harmful to competition in the
grocery market.
The lawsuit was filed on behalf of 25 consumers in states including
California, Texas and Florida who alleged the merger "will be used to
increase prices for groceries, decrease the quality of food, eliminate
jobs, close stores and offer less choice for consumers."
Kroger is the biggest grocer in the U.S. by revenue, and Albertsons is
the second-largest supermarket chain. Nearly 5,000 grocery stores would
be under one corporate umbrella if the deal, announced in October, goes
through.
The companies have defended the deal as providing a "more efficient
distribution chain" and also have said they are working with the U.S.
Federal Trade Commission on its regulatory review. The lawsuit appears
to be the first private action challenging the deal.
A representative for Albertsons declined to comment on Friday, and a
Kroger spokesperson did not immediately respond to a message seeking
comment.
Stores under the Albertsons umbrella include Balducci's, Shaw's, Kings
and Safeway. Kroger operates stores under banners including Harris
Teeter, Pay Less and King Soopers.
U.S. antitrust law lets private consumers sue over proposed mergers and
acquisitions, apart from any enforcement action brought by a state or
federal agency policing competition laws.
[to top of second column] |
An Albertsons grocery store is seen, as
Kroger agrees to buy rival Albertsons in a deal to combine the two
supermarket chains, in Glendora, California, U.S., October 14, 2022.
REUTERS/Aude Guerrucci
Plaintiffs' lawyer Joseph Alioto in San Francisco, who was among the
attorneys who filed the complaint, said "there's no question that
Albertsons is a significant rival" of Kroger's. "It's competition
that they are eliminating," he said.
The lawsuit also said it seeks to force the disgorgement of a $4
billion dividend that Albertsons paid to shareholders after
defeating a Washington state attorney general action challenging the
payout. Plaintiffs claim the dividend "gravely weakens Albertsons'
ability to compete."
A federal judge in Washington, D.C., separately declined to issue a
preliminary injunction blocking the dividend.
The case is: Whalen et al v. Kroger Co et al, U.S. District Court,
Northern District of California, No. 3:23-cv-00459.
For plaintiffs: Joseph Alioto of Alioto Law Firm; Joseph Saveri of
Joseph Saveri Law Firm; and other firms
For defendants: No appearance yet
(Reporting by Mike Scarcella in Maryland; editing by Leigh Jones)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|