Washington, D.C. — On Friday, December 16, the Washington State Supreme Court granted a further stay of Albertsons’ $4 billion special dividend payout to investors, to allow for further review of the anticompetitive effects. The Supreme Court granted this review on the basis that the Superior Court had committed an obvious or probable error by refusing to enjoin the payout. The American Economic Liberties Project released the following statement.

“The Washington Supreme Court understands there’s an urgent need to review Wall Street’s attempt to sabotage Albertsons and the communities they serve,” said Sarah Miller, Executive Director of the American Economic Liberties Project. “The Kroger-Albertsons $4 billion special dividend scheme would loot Albertsons for all it’s worth, gutting stores across the country and decimating jobs for thousands of workers — all to pad the pockets of a few private equity financiers. The Washington Supreme Court clearly understands the seriousness of the harm that this payout would cause, and we look forward to their review of the lower court’s obvious error.”

​​ A Kroger-Albertsons 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 eggs 17.2% for chicken, and 14.7% for bread, among other staple foodstuffs. Meanwhile, last week, Kroger reported a massive $3.7 billion in operating profits, a 37% increase over 2021.

​​ Albertsons’ $4 billion special dividend payout ahead of its merger with Kroger would render it unable to effectively compete while the deal is reviewed. Suits against the dividend argue that the majority private equity investors, Cerberus and Apollo, might be sabotaging Albertsons on purpose in order to secure the $25 billion payout once the merger goes through. The $4 billion special dividend payout would lower Albertsons’ liquidity rating and result in a non-investment credit rating during the pendency of the proposed merger. Antitrust regulators have been known to award “failing firm defense” exemptions to anticompetitive mergers if the acquired firm is in severe financial distress.

As Washington AG 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 successfully acquired 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 divestiture was a disaster. Within a year, Albertsons 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.​

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