Kroger and Albertson want to merge, but a Portland judge has said no. The companies used the standard pitter-patter: Oh, these poor companies. If they don’t get their way, they must close stores, lay off workers, etc.
The last time Kroger bought a grocery store chain, Kroger bought Harris-Teeter. The first thing that happened was that my favorite nearby Harris-Teeter closed. Other stores were closed, too. Mine had the perfect parking spot and was right across from the Metro. Next, Kroger rearranged everything for the surviving Harris Teeters. I found the flour on the aisle with a gazillion water brands, not the baking supplies. Starbucks and some other fancy drinks were positioned in the regular place that the flour should have been. Suddenly, even the remaining employees couldn’t find things.
Prices were mostly raised, or in some cases, Kroger replaced the quality products with items that appeared to allow more markup.
In court, Susan Musser, the Federal Trade Commission’s (FTC’s) chief trial counsel, opposed the merger, saying, “This lawsuit is part of an effort aimed at helping Americans feed their families.”
She’s right. We need more competition, less vertical integration, fewer mergers, and more local food systems.
We have four giant meat packing plants: Tyson, Cargill, Brazil-based National Beef, and JBS. These four control 85% of the beef industry. WH Group (Chinese), JBS, Hormel, and Tyson control about 67% of the pork market. Tyson and Pilgrims Pride control about 45% of the chicken market.
We also have five food and beverage companies: PepsiCo., Tyson Foods, JBS USA, Nestle, and Kraft Heinz.
Looking at this from a political viewpoint, two billionaires want Vice President Harris to fire Federal Trade Commission (FTC) Chair Lina Khan for doing her job, i.e., enforcing antitrust law and examining mergers for their competitive impact on consumer prices. But Harris is running partly on making basics like groceries more affordable for the middle class, so it’s doubtful she would do so if she had the power.
President Biden and Vice President Harris have empowered the FTC to lower prices, particularly food prices that skyrocketed during COVID and the Trump years. A president (or vice president) does not have the power to say to conglomerates that they must lower prices. This is true whether the prices relate to groceries, gasoline, hospitals, or anything else. However, using the FTC to create more competition has not been possible for a long time. It’s a good move.
The laws are on the books. It is time to use them for the good of consumers. Bureau lawyers and economists from the FTC’s Bureau of Economics investigate market dynamics to determine if the proposed merger would harm consumers. The results of these investigations are what we’re seeing related to the grocery prices now.