Kroger alleges the FTC’s administrative proceeding over its merger with Albertson’s violates constitutional protections against federal government overreach. The retailer said it also plans to defend the acquisition in an upcoming federal trial in Oregon, where the attorney general is seeking to block the blockbuster deal over concerns it would be anticompetitive and result in a monopoly in many markets.
The merger has faced opposition from politicians, unions and consumer advocate groups across the country. They have raised concerns that fewer supermarket competitors would hurt workers, consumers and suppliers by giving Kroger too much market share and power over pricing and the labor market.
Kroger alleges the FTC’s administrative proceeding against the deal violates the Constitution because the administrative law judge cannot be removed by the president and because it would judge Kroger’s rights to contract with another private business administratively through the executive branch rather than through the independent judiciary.
The grocery store chain also faulted the FTC for challenging the merger in separate tribunals. It pursued a federal court case in Oregon, where evidentiary hearings are set to begin next week, and an administrative proceeding that could take years to resolve.
“The merger between Kroger and Albertson’s is squarely focused on ensuring we bring customers lower prices starting day one while securing the future of good-paying union jobs,” said Rodney McMullen, Kroger chairman and CEO. “We stand prepared to defend this merger in the upcoming trial in federal court — the appropriate venue for this matter to be heard — and we are asking the court to halt what amounts to an unlawful proceeding before the FTC’s own in-house tribunal.”
The deal would result in new ownership for the longtime Chicagoland grocer Jewel-Osco, which has stores in Munster, Dyer, Crown Point and Chesterton. Kroger has said the merger is necessary to achieve the economy of scale to compete with larger retailers like Walmart, Target and Amazon that do not exclusively sell groceries but that have gained a larger share of the grocery market in recent years.
It has said it would make $1 billion in price cuts, but consumer groups fear that over time there would be no competition to keep its prices in check.
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