©Reuters. A screen displays the Kroger Co corporate logo on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 14, 2022. REUTERS/Brendan McDermid/File Photo
NEW YORK (Reuters) – Unionized workers at supermarkets Kroger (NYSE:) and Albertsons (NYSE:) celebrated on Monday the U.S. Federal Trade Commission’s lawsuit to block the retail merger, citing the possibility of higher wages. lowest and highest prices in one grocery store. chain.
The FTC sued Monday to block Kroger’s $24.6 billion deal to buy small rival Albertsons, saying it would lead to higher food prices, putting a financial strain on Americans.
“The FTC’s decision reflects clear concerns about the impact such a megamerger could have on workers, food prices and millions of customers,” Marc Perrone, president of the United Food and Commercial Workers International Union, said in a statement.
The union, which represents more than 100,000 Kroger and Albertsons workers, has staunchly opposed the deal since it was announced in October 2022. A coalition of UFCW locals jointly released a statement applauding the lawsuit saying that the FTC “recognizes the threat” the merger may have caused. “This is a step in the right direction to build a better food system in this country,” UFCW Local Chapters 5, 7, 324, 400, 770, 1564, 3000 said in a statement.
The UFCW and its local chapters have met with state attorneys general and federal officials, staging protests and launching a website called nogrocerymerger.com to mobilize opposition to the deal. “This is such an important moment in history where this consolidation is dangerous,” Kim Cordova, president of UFCW Local 7, told Reuters, underscoring the compression effects of inflation on Americans. The union represents hundreds of workers at King Soopers and Safeway, chains owned by Kroger and Albertsons, in Colorado and Wyoming.
“What would happen to economies if they suppressed wages along with their ability to control food prices?” Cordova asked.
Kroger and Albertsons say the $24.6 billion merger would help them better compete against Amazon (NASDAQ:) and Walmart (NYSE:). As a combined retailer, Kroger and Albertsons said they will invest $500 million to lower prices and $1.3 billion to improve Albertsons stores. They also promised union job losses as a result of the merger.
The chains have proposed to sell 413 stores and eight distribution centers to C&S Wholesale Grocers. However, the states of Colorado and Washington have already sued to block the deal.
A union primarily representing Fred Meyer, Albertsons and Safeway stores expressed support for the deal.
They argued that Cerberus Capital, which acquired Albertsons in 2005, would have sold the supermarket chain to someone else if it had not been acquired by Kroger.
“When you look at all the pieces on the table, at the end of the day, the status quo is not an option,” said Miles Eshaia, communications coordinator for UFCW Local 555.
“I would rather work with C&S than Amazon, Walmart or Target,” he said, asserting that they are not pure food companies.