The U.S. Federal Trade Commission, along with a group of nine attorneys general from various states, have filed a lawsuit to prevent the merger of Kroger and Albertsons. The FTC alleges that the combination of the two major grocery chains would lead to higher prices for shoppers and lower wages for workers.

According to the FTC, the $24.6 billion acquisition of Albertsons by Kroger would create one of the largest grocers in the country. Both companies had attempted to address antitrust concerns by agreeing to divest over 400 stores and other assets. Despite this, the FTC issued an administrative complaint and authorized a lawsuit in federal court to block the merger.

The bipartisan group of attorneys general from Arizona, California, Washington D.C., Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming have joined the court complaint against the merger. They express concerns that the merger would result in higher grocery prices for consumers and worsen working conditions for essential grocery store workers.

Both Kroger and Albertsons have defended the merger, with Kroger arguing that blocking the deal would harm consumers and workers. Albertsons criticized federal regulators for overlooking the dominance of larger retailers like Walmart, Amazon, and Costco.

The proposed merger between Kroger and Albertsons has faced scrutiny from federal and state regulators for over a year. The companies had initially announced the deal in October 2022, touting the benefits of increased competition with larger retailers. However, concerns about the impact on prices in a time of rising inflation have prompted the FTC to take action against the merger.

The FTC argues that the merger would reduce competition between the supermarkets, potentially leading to higher prices, lower quality of service, and diminished worker rights. The agency also warns that the combined entity would have less incentive to enhance the customer experience and could limit options for grocery employees.

As the legal battle unfolds, Kroger and Albertsons continue to defend their merger plans, emphasizing the potential benefits for consumers and workers. With the outcome uncertain, the future of this mega-merger hangs in the balance as regulators and industry players clash over its implications on the grocery market.