Kroger fights antitrust case as lacking 'real-world' facts
Kroger continues to fight for its planned $24.6B merger with Albertsons
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Strategic Resources Group managing director Burt Flickinger analyzes the merger between supermarket giants Kroger and Albertsons on 'The Claman Countdown.'
Food and drug retailer Kroger Co on Wednesday asked a U.S. judge to dismiss as "speculative" a consumer antitrust lawsuit alleging the company's proposed $24.6 billion acquisition of rival Albertsons Companies Inc would lessen grocer competition and drive up prices.
Lawyers for Kroger said in a filing in California federal court that the grocery store shoppers who sued over the deal have failed to define the relevant market necessary to evaluate grocery store competition and to identify how the acquisition would hurt consumers. The attorneys said the lawsuit was lacking "real-world facts."
U.S. competition law "does not turn every grocery store consumer in the country into a roving antitrust enforcer," lawyers for Kroger told U.S. District Judge Vince Chhabria.
An undated handout photo shows a Kroger vehicle delivering groceries in the U.S. obtained by Reuters on June 15, 2022. Kroger/Handout via REUTERS (Reuters Photos)
A hearing is scheduled for May 18.
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An Albertsons spokesperson declined to comment, and representatives for Kroger did not immediately respond to similar messages.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| KR | THE KROGER CO. | 58.03 | -0.73 | -1.23% |
| ACI | ALBERTSONS COMPANIES | 18.88 | -0.22 | -1.15% |
The suit from 25 consumers in states including California, Texas and Florida was filed amid the Federal Trade Commission's review of Kroger's proposed acquisition. State antitrust enforcers also are looking at the deal.
U.S. antitrust law allows private actions against mergers and acquisitions.
A lawyer for the plaintiffs did not immediately respond to a message seeking comment.
Portland, OR, USA - June 30, 2021: A shopper enters an Albertsons grocery store and its Sav-on pharmacy in Portland, Oregon. (iStock / iStock)
Kroger's attorneys said in Wednesday's filing that "the proposed merger is in the early stages of regulatory review and, as a part of that process, defendants expect to divest a number of stores."
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Attorneys for Albertsons separately asked the judge to dismiss a claim in the lawsuit challenging the propriety of a $4 billion special dividend that the company paid to shareholders.
Shoppers are seen in a Kroger supermarket on October 14, 2022, in Atlanta, Georgia. ELIJAH NOUVELAGE/AFP via Getty Images (ELIJAH NOUVELAGE/AFP via Getty Images / Getty Images)
A group of state attorneys general failed in state and federal courts to block the payment, which they alleged would weaken Albertsons, and Albertsons paid the dividend in January.
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The deal would bring nearly 5,000 stores under one corporate umbrella.
Kroger controls stores under banners including Harris Teeter, Pay Less and King Soopers, and stores under the Albertsons umbrella include Balducci's, Shaw's, Kings and Safeway.