A lot is at stake in a federal courtroom in Portland as a judge hears arguments for and against the Albertsons-Kroger grocery store merger plan.
The Federal Trade Commission is working to stop the merger, arguing that it will be bad for consumers. Both sides delivered opening statements on Monday in a packed courtroom presided over by U.S. District Judge Adrienne Nelson.
FTC Chief Trial Counsel Susan Musser said the merger would result in Kroger “swallowing” Albertsons.
“Stopping this multibillion-dollar deal will keep in place the vigorous competition that acts as a check on rising grocery prices and spurs improvements in quality and innovation,” she said.
Kroger attorney Matthew Wolf said the merger would immediately lower some prices for shoppers at Albertsons, where prices are now 10-12% higher than at Kroger stores. Albertsons and Kroger have also argued the merger will help them compete against Costco and Walmart.
“We’ve seen too much consolidation in the grocery industry. It’s one of the reasons why this kind of gouging and price inflation is, I think, happening the way it has, and we should be going in the other direction. We need more stores, more price competition, shorter lines, not longer lines, not higher prices and not less competition,” Tom Geiger of the United Food and Commercial Workers Union in Seattle said.
It is just one of many unions across the country that have formed a conglomerate to fight this merger. If the merger happens, 124 grocery stores in Washington would be sold to C and S Wholesale Grocers, according to Supermarket News.
Geiger also pointed out that there’s no guarantee the new buyer will keep those stores open.
“With the analysis that the value of the real estate is about 50% higher than the value of the stores that they’re going to be buying. So we fear that they could just unload these properties just as a real estate investment never selling a can of beans or gallon of milk.”
This region’s already had other grocery stores close in recent years, leaving some neighborhoods without one.
“The one about a mile north, the QFC, was closed four years ago,” said local resident Debbie Wheeler, who said she is now frequenting the Wedgewood Safeway in Seattle. Another local, Kiko Van Zandt, said she was also forced to find a new grocery store when the one she shopped near University Village in Seattle closed.
“I come and shop here twice a week. People are friendly. It usually has everything that I need. Right down the street, I was just sitting in a knitting group up the street on the way home. I can stop by, so the convenience and the people I think,” she explained as the reasons she likes this store.
“This is one of these things that connects with almost everybody. It’s almost uncanny how often people encounter a grocery store worker,” Geiger noted. He also argues that grocery workers will lose a lot of ground in bargaining new contracts.
“When you’re bargaining with them for a new agreement, you can kind of weigh one off of the other. But if there’s one company that could strike, there’s no leverage for the worker. That goes away,” Geiger said.
Even if C and S wholesale grocers kept stores like this one open, it’s not known if there would still be a pharmacy inside. The company right now operates and supports 7,500 independent supermarkets, but only one pharmacy.
The hearings in Portland that started Monday are expected to last at least two weeks.
A separate suit to stop the merger brought by Washington Attorney General Bob Ferguson is scheduled to begin in mid-September in the U.S. District Court in Seattle.