In a recent development during the Federal Trade Commission's (FTC) lawsuit challenging Kroger's proposed $25 billion merger with Albertsons, a Kroger executive acknowledged in court that prices for milk and eggs had exceeded inflation costs. The admission sheds light on the concerns raised by Local UFCW President Kim Cordova, who has been vocal about potential price gouging and its impact on consumers. The admission came to light during a hearing held in Oregon Federal Court on Tuesday.

The admission was made through an email presented by FTC attorneys, which featured Kroger's Senior Director for Pricing, Andy Groff, communicating with his superiors during the merger process. Groff pointed out that retail inflation had been "significantly higher than cost inflation." Wyoming is one of the parties involved in the FTC's antitrust lawsuit, and Local UFCW President Kim Cordova, representing approximately 750 grocery store workers in Wyoming, expressed satisfaction with the admission during an interview with Cowboy State Daily on Friday.

Cordova firmly believes that if the merger between Albertsons and Kroger, referred to as the "Albert-Krogerson" deal, were to proceed, food deserts would expand and consumers would face increased prices due to reduced competition. She highlighted a USDA map showing food deserts expanding after the 2015 merger of Albertsons and Safeway. Cordova also expressed concern over potential job losses, particularly if plans to sell off stores to C&S, a food distributor, do not materialize as expected.

In response to the admission and Cordova's concerns, a spokeswoman from Kroger told Cowboy State Daily that the highlighted email was "cherry-picked" and did not reflect the company's long-standing business model of lowering prices by reducing margins. She emphasized that Kroger's retail prices encompass various costs, including labor, transportation, advertising, and other expenses that have significantly increased since 2020. The spokeswoman added that Kroger works tirelessly to keep prices as low as possible, especially for essential products like milk and eggs, despite challenges and cost fluctuations. She cited Walmart as a key competitor and asserted that Kroger's commitment to maintaining reduced margins and competitive pricing would remain unchanged even after merging with Albertsons.

When it comes to egg prices, industry analysts attributed the record-high prices in early 2023 to an outbreak of avian influenza that resulted in the loss of nearly 60 million birds, thus causing a decline in the supply. In Wyoming, egg prices reached around $5 per dozen, marking a 49% increase that persisted until approximately June, when prices finally began to taper off.

The FTC attorneys highlighted another noteworthy aspect in Kroger's testimony – the company's reliance on Albertsons for price comparisons. Kroger's Senior Director for Pricing stated that five everyday essentials, including milk, eggs, sugar, bananas, and iceberg lettuce, are areas where Kroger aims to be particularly competitive. They utilize Walmart, Aldi, and a designated "key traditional retailer" as benchmarks in each market, with Albertsons often serving as that retailer. Cordova seized upon this information, pointing out that Kroger's previous claims that Albertsons wasn't its primary competition were dubious, as demonstrated by their reliance on Albertsons as a key competitor.

Cordova has previously highlighted the concentration of the grocery store industry, particularly in regions such as Southern California, Colorado, Wyoming, New Mexico, Arizona, and Texas, where Safeway, Albertsons, and Kroger have a significant market presence. She emphasized the importance of competition between the two companies in keeping prices low and securing strong contracts for union members.

As the FTC's lawsuit against the proposed merger continues, the admission of price gouging by a Kroger executive has only reinforced the concerns voiced by Local UFCW President Kim Cordova. The impact on consumers, workers, and the grocery market as a whole remains a topic of ongoing debate and discussion.

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