Ferguson sues to block grocery merger

Jan. 15—SEATTLE — Washington Attorney General Bob Ferguson has filed a lawsuit to block the merger of the two largest supermarket corporations in the state, according to an announcement from Ferguson's office.

"This merger is bad for Washington shoppers and workers," Ferguson wrote in the announcement. "Free enterprise is built on companies competing, and that competition benefits consumers."

The suit, filed Monday in King County Superior Court, asserts the proposed merger of Kroger and Albertson's in Washington state will severely limit shopping options for consumers and eliminate vital competition that keeps grocery prices low, according to the announcement. The suit also asserts that a proposal by Kroger and Albertsons to mitigate the impacts of their merger, which includes selling off more than 100 stores in Washington, does not change the fact that Kroger would still enjoy a near-monopoly in many markets in the state. In addition, the plan to sell the stores to a company that is primarily a wholesale supplier could set up many of the divested supermarkets to fail, endangering Washington jobs and further diminishing choices for Washington shoppers.

Kroger and Albertsons are the two largest supermarket chains in Washington — more than half the supermarkets in the state are owned by one or the other of them — and the second and fourth largest supermarket operators in the country, according to the announcement. They currently have more than 700,000 employees in nearly 5,000 stores across 49 states. They have combined annual revenue in excess of $200 billion. Kroger alone has more than 21,000 workers in Washington.

Albertsons owns Safeway and Haggen, while Kroger owns QFC and Fred Meyer, according to the announcement. Collectively, Kroger and Albertsons operate more than 300 supermarkets in Washington, including Safeway stores in Moses Lake and Ephrata.

In late August 2023, the companies proposed to sell off 413 stores nationwide — 104 in Washington — plus some distribution and brand assets to diminish concerns about the new combined company's market dominance, according to the announcement. The stores would be sold to C&S Wholesale Grocers, a New Hampshire-based wholesale distributor that does not currently operate any supermarkets in Washington. If the merger succeeds, C&S would become the second-largest supermarket operator in the state nearly overnight.

Ferguson's lawsuit asks the court to find that the merger violates Washington antitrust law, and to issue an injunction permanently blocking the merger nationwide, the announcement said.

"Shoppers will have fewer choices and less competition, and, without a competitive marketplace, they will pay higher prices at the grocery store. That's not right, and this lawsuit seeks to stop this harmful merger," Ferguson said.