Grocery stores are an important part of life. However, the one you go to is likely because it’s what’s nearby. You don’t want to have to drive across town just to get your groceries.
You depend on the grocery store near you to have competitive prices.
However, what happens when there’s only one grocery store, and they know that they can charge whatever they want because you don’t have a choice?
That’s called a monopoly, and several states are now dealing with the possibility of such because of a merger that is to take place between Kroger and Albertsons. A total of eight states could encounter the monopoly. It would eliminate the competition and create higher prices for Americans.
The Federal Trade Commission has established a lawsuit to block the proposed merger. The $24.6 billion deal is supposedly designed to help them compete more effectively with such rivals as Walmart, Costco, and Albertsons.
JP Morgan analyst Ken Goldman said that if the merger goes through, they’d control approximately 13 percent of the US grocery market. Walmart controls 22 percent of it already.
Both Kroger and Albertsons have identified that they will challenge the FTC lawsuit in court.
The director of the FTC’s Bureau of Competition, Henry Liu, explained in a statement:
“Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today,”
Large corporations have a tendency to want to merge. However, the Justice Department will often block mergers to ensure that there is healthy competition.
There’s no telling what will happen with the merger. However, Kroger and Albertsons claim that consumers will see higher prices if the merger isn’t allowed to proceed. Reality or scare tactic? We’ll have to wait and see what happens as the FTC lawsuit moves forward.
In the meantime, you might want to break out the store circulars and shop where the best deals really are, even if it means a slightly longer commute to do so.
