©Reuters. FILE PHOTO: An Albertsons grocery store is seen, as Kroger agrees to buy rival Albertsons in a deal to merge the two supermarket chains, in Glendora, California, U.S., October 14, 2022. REUTERS/Aude Guerrucci/File Photo
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By David Shepardson
WASHINGTON (Reuters) – U.S. District Judge Adrienne Nelson set a hearing on Monday to begin Aug. 26 on the Federal Trade Commission’s request for a preliminary injunction to block the retailer’s $24.6 billion deal. Kroger (NYSE) supermarkets to purchase smaller rival Albertsons (NYSE:).
The FTC sued last month to block the deal that would create a supermarket empire with more than 4,000 stores, saying it would raise food prices for millions of Americans. The deal has drawn intense scrutiny from lawmakers and consumer groups concerned about rising food prices, job losses and store closures.
Nelson of the U.S. District Court in Portland, Oregon, said both sides must submit a proposed briefing schedule by Friday.
Kroger said last week it was committed to defending the Albertsons merger in court following the FTC’s US lawsuit, with Kroger CEO Rodney McMullen saying the company believes “this is the best outcome for American families” . The companies cannot close the deal due to pending legal challenges.
The FTC and eight states challenged the deal, which would strengthen Kroger’s position as the second-largest player in the U.S. grocery market behind Walmart (NYSE:).
The FTC’s lawsuit comes at a time when the Biden administration has pushed to lower food prices and has opposed large mergers that risk price increases, hurting consumers in industries ranging from medicines to airlines .
The FTC said the deal first announced in October 2022 would eliminate fierce competition between Kroger and Albertsons.
But Kroger defended its business model, saying it has reduced prices every year since 2003 and that the strategy will apply to the merged company.
Kroger, the largest U.S. grocer by revenue, has proposed divesting 413 stores and eight distribution centers to C&S Wholesale Grocers, and said it may have to divest another 237 stores to gain regulatory approval.
The FTC called that proposal inadequate.