Washington, D.C. — This afternoon, U.S. District Court Judge Adrienne Nelson granted the FTC and 9 state attorneys generals’ motion for preliminary injunction of the Kroger-Albertsons grocery mega-merger—blocking the largest grocery merger in history. In separate litigation in the state of Washington, WA Superior Court Judge Marshall Ferguson made the same decision in favor of the Washington State Attorney General, saying the merger would create a “colossus.” In response to both of these victories for the FTC and states opposing the merger, the American Economic Liberties Project released the following statement.

“This decision is a resounding victory for workers, consumers, independent retailers, and local communities nationwide — and a powerful validation of Chair Khan and the FTC’s rigorous enforcement of the law,” said Laurel Kilgour, Research Manager at the American Economic Liberties Project. “The FTC presented a strong case that Kroger and Albertsons fiercely compete head-to-head on price, quality, and service. The ruling is a capstone on the FTC’s work over the past four years and includes favorable citations to the FTC’s recent victories against the Tapestry-Capri, IQVIA-Propel and Illumina-Grail mergers. The Court also cites longstanding Supreme Court law which recognizes that Congress was also concerned with the impacts of mergers on smaller competitors. We applaud the FTC for securing one of the most significant victories in modern antitrust enforcement and for successfully protecting the public interest from harmful consolidation.”

The court found that though the merger would be presumptively unlawful in any single affected market, FTC economic expert Dr. Hill successfully demonstrated that the grocery mega-merger would have exceeded monopoly thresholds in over 2,500 local markets where Kroger and Albertsons currently compete. Rejecting the argument that the merger would produce efficiencies that negate proven harms, Judge Nelson invoked decades-old Supreme Court precedent finding that Congress intended to protect “viable, small, locally owned businesses.”

Outside of the local geographic impacts, the court also adopts both of the FTC’s proposed product markets, finding that Kroger and Albertsons compete both as “supermarkets” and the broader category of “large format stores.” The court found the merger in violation of the law as to both markets.

Defendants’ counter-arguments were unavailing. Expert economist Dr. Mark Israel failed to define alternative product or geographic markets, and the court rejected his proposed “actual monopolist test,” which included the spurious conclusion that even if the merger resulted in a 100% market share, there would be no affect on consumer price. The court stated, “Dr. Israel’s analysis does not squarely address the matters necessary to determine whether post-merger market concentration will substantially lessen competition.” Dr. Israel was the economic expert for defendants in both FTC v Tapestry-Capri and United States et al. v. Google (the “Search” case) and several judges have found his work not to be credible.

Defendants had sought to address concerns that the merger would harm competition with the proposed divestiture of 579 stores to grocery wholesaler and logistics provider C&S.  The court found “serious concerns about C&S’ ability to run a large-scale retail grocery business that can successfully compete against the proposed merged business, as would be required to offset the competitive harm of the merger. C&S does not have any experience running a large portfolio of retail grocery businesses.” The participation of Albertsons’ current COO in running the divested stores would “not fully mitigate C&S’ inexperience and lack of success in grocery retail and cannot overcome the difficulties inherent to the selection of assets chosen and the structure” of the divestiture deal.

Although the court ultimately decided for the FTC on other grounds, it also confirmed as a legal matter the viability of labor theories of harm.

A third case challenging the merger remains pending in Colorado.

Economic Liberties has been organizing and mobilizing opposition to the Kroger-Albertsons merger since the deal was announced in October 2022. Working closely with local chapters of the UFCW and the Stop the Merger Coalition, the organization highlighted the threat this deal posed to workers, consumers and local communities through a combination of compelling research and fact-checking, public education, advocacy, and events.

Read “Supermarket Squeeze: The Real Costs of the Kroger-Albertsons Deal” to learn more.

Read Economic Liberties’ Myth/Fact on the Kroger-Albertsons Merger here.

Read Direct of Policy and Advocacy Morgan Harper’s Cincinnati.com op-ed on the harms of the merger here.

Watch the virtual rally, “Kroger and Albertsons: A Grocery Consolidation Disaster,” here.

Learn more about Economic Liberties here.

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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.