(Washington State) A King County judge ruled today that the proposed merger of grocery giants Kroger and Albertsons is unlawful and cannot go forward. The decision came following a September trial in Attorney General Bob Ferguson’s antitrust case challenging the merger. Today’s ruling is the first decision on the merits of the case amongst multiple state and federal challenges of the merger.
King County Superior Court Judge Marshall Ferguson agreed with the Attorney General that the merger violates Washington antitrust law, and awarded the state its costs and fees.
At the hearing, Judge Ferguson said: “In my view, the evidence convincingly shows that the current competition between Kroger and Albertsons stores is fierce in the State of Washington. By contrast, the divestiture buyer, C&S Wholesale, with its limited retail experience, will not be able to replicate the ferocity of that competition or compete in Washington against the colossus of a merged Kroger and Albertsons.”
Today’s decision means the merger cannot go forward. Kroger and Albertsons are the two largest supermarket chains in Washington and the second and fourth largest supermarket operators in the country. More than half of all supermarkets in Washington state are currently owned by either Kroger or Albertsons, and they account for more than 50% of all supermarket sales in the state. Albertsons owns Safeway and Haggen, while Kroger owns QFC and Fred Meyer.
“We’re standing up to mega-monopolies to keep prices down,” Ferguson said. “We went to court to block this illegal merger to protect Washingtonians’ struggling with high grocery prices and the workers whose jobs were at stake. This is an important victory for affordability, worker protections and the rule of law.”
Collectively, Kroger and Albertsons operate more than 300 supermarkets in Washington, including approximately 194 in the Seattle-Tacoma-Bellevue metropolitan area. They currently have more than 700,000 employees in nearly 5,000 stores across 49 states. They have combined annual revenue in excess of $200 billion.
Ferguson filed his antitrust lawsuit in January in King County Superior Court, seeking to block the merger of Kroger and Albertsons. Ferguson asserts the merger violates Washington antitrust law, eliminates Kroger’s closest competitor and decreases customer choice.
Ferguson’s investigation revealed company executives expressed that the merger might be illegal. After rumors of the proposed merger surfaced, a vice president with Albertsons wrote that “you are basically creating a monopoly in grocery with the merger… [it] makes no sense.”
An Albertson’s Human Resources director wrote of the merger: “It’s all about pricing and competition and we all know prices will not go down.”
The Office of the Attorney General’s Antitrust Division is responsible for enforcing the antitrust provisions of Washington’s Consumer Protection Act and federal antitrust laws. The division investigates and litigates complaints of anticompetitive, or monopolistic, conduct and reviews potentially anticompetitive mergers. The division also brings actions in state and federal courts to enforce antitrust laws. It receives no general fund support, funding its own actions through recoveries made in other cases.
For information about filing a complaint about potential anticompetitive activity, visit https://fortress.wa.gov/atg/
