Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) sent a letter to Federal Trade Commission Chair Lina Khan on Tuesday, asking that the regulator oppose the merger between grocery giants Kroger and Albertsons.
The progressive politicians argued that the proposed $25 billion deal would lead to higher prices and lower wages, hurting shoppers and workers alike. Kroger and Albertsons are two of the largest grocery chains in the country.
“Kroger’s and Albertsons’ histories of aggressive profiteering during the pandemic present a dangerous roadmap for how a larger and more powerful company would act if this acquisition were allowed to proceed,” Warren and Sanders wrote.
The lawmakers went on to call both companies “anticompetitive and antiworker.”
“The FTC should, when evaluating the impact of a potential merger, examine Kroger’s and Albertsons’ records of raking in profits and providing massive payouts for executives and big shareholders while putting their frontline employees at risk,” they wrote.
Warren and Sanders were joined on the letter by Rep. Jan Schakowsky, an Illinois Democrat. (Read the full letter below.)
Kroger and Albertsons have a combined 5,000 stores and 710,000 workers in the U.S., with dozens of chains between them, such as Fred Meyer and Ralphs (Kroger) and Safeway and Jewel-Osco (Albertsons).
Workers at many stores under both companies are represented by the United Food and Commercial Workers union. At least four affiliates of that union have come out against the merger, saying they have concerns about store closures and layoffs. One Kroger worker recently told Reuters: “I wish they would put their money toward trying to lower prices and increase wages, rather than gobbling up the competition.”
The boards of both companies unanimously approved the proposed deal, saying it would help them compete with large rivals like Walmart and Amazon. Kroger CEO Rodney McMullen argued in a joint statement with Albertsons that together they would “build a more equitable and sustainable food system.” He also noted the deal would “generate greater returns for our shareholders.”
In their letter, Warren and Sanders pointed to a survey of 10,000 Kroger workers conducted by the nonprofit Economic Roundtable last year at the request of the UFCW. The authors found that “the living and working conditions of Kroger workers have declined markedly over the past 20 years,” leaving more than three-quarters of the company’s workforce food-insecure.
“These workers cannot afford balanced and healthy food,” the report’s authors wrote. “They run out of food before the end of the month, skip meals, and are hungry sometimes. Those with children report they go hungry to provide food and other essentials for their children. Kroger workers’ exceptionally high rate of food insecurity is seven times greater than the U.S. average.”
The authors also blasted Kroger for ending its “hero pay” program, which paid a $2-per-hour bonus for working during the pandemic, after just a few weeks during 2020.
Sanders previously said that allowing the companies to merge would be “an absolute disaster.”
Kroger and Albertsons would need FTC approval to move ahead with the deal, and the agency is expected to take a close look at how it could affect local markets. The companies are already preparing to divest several hundred stores in certain areas where they expect the agency would determine that the merged entity would be too powerful.
Khan, a Biden appointee, has rankled business leaders with her scrutiny of mergers since arriving at the commission in 2021. This past fiscal year, the commission issued more letters of investigation related to mergers than in any other year of the past decade, The Wall Street Journal recently reported.
“In all too many areas of our economy, including agriculture, airlines, health care, we’ve seen significant consolidation and reduction of competition,” Khan said in an interview with the Journal. “Mergers have played a role in that.”
The letter: