California AG says he may sue to stop Kroger from buying Albertsons. Rob Bonta, California’s attorney general, stated that his office was worried about Kroger’s (KR.N) proposed acquisition of competitor Albertsons (ACI.N) for $24.5 billion and may file a lawsuit to prevent it. Although the choice has not yet been taken, Bonta continued: “Right now, there’s not a lot of reasons not to sue.”
Concerns raised by Bonta include the possibility of increased consumer costs, reduced compensation to California farmers, the potential for the development of food deserts, and potential negative effects on employees.
An almost 5,000-store supermarket chain would be formed due to the purchase, announced in October 2022. IToget regulatory permission for the transaction, the firms announced in September that they would sell more than 400 grocery outlets to C&S Wholesale Grocers.
According to a Kroger representative, only non-unionized stores, such as Walmart and Amazon, will profit if the merger is stopped.
“Kroger joining with Albertsons will mean lower prices for customers, secure union jobs, and more food directed to hungry families, with 10 billion meals committed to people in need across America by 2030,” stated a spokesman. With 34.8% of the market, Walmart (WMT.N) dominates the American grocery industry, according to Food and Water Watch.
The Federal Trade Commission’s chair, Lina Khan, and Bonta met and discussed various factors, including the grocery merger, according to Bonta, who spoke in Washington. The FTC is examining the agreement to make sure that antitrust regulations aren’t being broken.
Additionally, Bonta’s office has been investigating whether the agreement would result in “pharmacy deserts,” making it more difficult for patients to purchase medications in rural or urban regions with lower incomes.
In 30 populated U.S. cities, research by the University of Southern California in 2021 revealed that one in three areas lacked appropriate access to essential pharmacy services.
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