Legal analyst discusses trial over Kroger-Albertsons merger

Published: Aug 26, 2024 Duration: 00:04:03 Category: News & Politics

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Kroger and Albertsons are fighting the FT CS attempt to block their merger. A federal judge in Portland Oregon is hearing from both sides in a trial that started Monday and it's scheduled to last for three weeks. The Federal trade Commission is requesting a preliminary injunction to delay the deal. Federal regulators argue that the merger is anti competitive and would lead to higher grocery prices. Kroger says that's not the case and has pledged to lower prices after the merger. The retailers say that the merger is necessary to compete with other stores like Walmart, Amazon and Costco. So joining us with more details is our nineties legal expert Whitney trailer Whitney. Good morning, good morning to you. All right. This is not an ordinary trial. What is going on? What is the current trial all about? So this is actually a preliminary injunction hearing and so what happens in normal trials is it takes months years to get to trial and here what the FTC is saying is we're trying to stop this merger before we get an ultimate decision at trial. And so this, this is sort of a, a quick trial, a preliminary injunction. So they're saying we wanna stop the merger. They're gonna have a, a hearing. They, they're expecting about 40 witnesses. It should take about three weeks and if they prevail, then the merger will not be able to go forward until the ultimate trial is completed. If they, if they lose, then the merger could presumably go forward while, while the pending. All right. So let's dissect this a little bit further. What are the FT CS primary arguments? Well, the FTC, this is interesting. So, Antitrust is all about um, competition and the notion behind that is that competition is good because it forces people to keep prices down. It gives the best quality and service because if you know your competitors over here doing, doing a great job, you're gonna do a great job. And so what the FTC is saying is that, look, if they merge, there's gonna be about 579 stores that they would, they would, they're saying they would sell them to CNS wholesale. But they're saying, hey, if, if you end up merging, then you'll be the only game in town in many places, some of the stores will close and in rural places there won't even be a grocery store or a bit of a food desert, a food desert. Exactly. And some people would have to actually get their groceries from a gas station or something. So they're saying, hey, if you close, there's nobody to compete with you can raise prices, you can do whatever with quality and you can do what you want with worker wages because they don't have anywhere else to go. Now, on the opposite side of this, but it's the grocery stores argument. So the grocery store is saying, hey, uh FTC, you don't understand the grocery sector. They're saying that they can't compete with stores like Walmart and Costco and Walmart, for example, they did $247 billion last year compared to just 63 billion, about 20 years ago, Costco at the same time went up 400%. So they're saying in order for us to compete and give these prices, we, we need to merge and they're trying to make the argument that hey, we'll actually be able to lower prices because if uh Kroger, for example, has Coke at a certain price, a low price and we have Pepsi at a low price, we can come together and offer those low prices together. So they're, they're saying that it's actually going to help them to lower prices. Ok. So this is obviously all about Coloradans at the center of this. I mean, people in general, but we're supposed specifically focusing on Coloradans, what is the potential outcome to them? Well, so it'll be interesting because, and actually Colorado and Washington, the attorney generals in both those states have uh filed individual actions because they have, I think Colorado, we have 200 stores and Washington has 300 stores. And so this could really impact, especially in the rural places, right, that it's gonna create a food desert. So, so that's why there's so, and there's a bunch of actions, the FTC filed the lawsuit with a bunch of other attorneys general, Colorado and Washington filed their own separate action. And now actually the grocery stores, Kroger has filed an action against the FTC saying this is unconstitutional and it's an overreach. So there's a bunch of litigation going on right now. All right. Well, we're gonna have to follow this closely and see what happens. Whitney, thank you for helping us get started on this.

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