Kroger, Albertsons' attempt to dismiss antitrust lawsuit rejected

SEATTLE - A King County judge blocked Kroger and Albertsons' attempt to dismiss Washington state's lawsuit against their planned merger, allowing the case to continue.

In Jan. 2024, Washington Attorney General Bob Ferguson filed a lawsuit to block the monumental $4 billion merger, and both companies motioned to dismiss the suit. King County Superior Court Judge Marshall Ferguson rejected that motion on Friday.

Supermarket giant Kroger announced its plan to acquire Albertsons in 2022, and ever since has been mired in antitrust lawsuits filed in countless states across the U.S. Senators Maria Cantwell and Patty Murray, D-WA, wrote to the Federal Trade Commission (FTC) that same year warning of the acquisition. Ferguson and six other state Attorneys General previously sued to block the $4 billion shareholder payout ahead of the proposed merger.

Ferguson argues this merger — between the two largest supermarket chains in the state — will limit customer choice and "eliminate vital competition that keeps grocery prices low." The Attorney General's Office (AGO) filed suit, asserting the merger violates Washington's antitrust law, followed by a lawsuit from the FTC.

"Free enterprise is built on companies competing, and that competition benefits consumers," said Ferguson. "My legal team and I will continue working to protect Washington consumers and workers from increased prices and fewer choices."

The two companies own more than half of all supermarkets in Washington, according to the AGO — Albertsons owns Safeway and Haggen, Kroger owns QFC and Fred Meyer — and their revenue nationwide is in excess of $200 billion.

The AGO claims company executives have openly admitted the merger may be illegal and never expected prices to lower for consumers. In emails obtained by investigators, an Albertsons VP wrote that "[we] are basically creating a monopoly in grocery with the merger… [it] doesn't make sense." An Albertsons HR director wrote the merger is "all about pricing and competition and we know prices will not go down."

According to the lawsuit, QFC considers Safeway and Albertsons their main competitor in the Seattle area, and elsewhere in the state, Albertsons considers Fred Meyer or QFC their main competitors. The merger, Ferguson argues, totally eliminates that competition.

The companies have proposed selling off hundreds of stores to C&S Wholesale to satisfy federal regulators. Ferguson says C&S operates just 23 supermarkets; this selloff would make the wholesale company the second-largest supermarket operator in the country. This same thing occurred with Washington-based Haggen in 2015, when Albertsons merged with Safeway and sold off 26 stores to the regional supermarket chain.

The AGO said Haggen lacked the infrastructure to quickly expand to a multi-state grocery retailer, and filed for bankruptcy less than a year later — which allowed Albertsons to reacquire most of those stores it divested, some of which they bought back for just $1 at auction.

The antitrust trial is slated to begin on Sept. 16.