In a bid to safeguard competition and protect consumers, Washington state is taking legal action to halt the proposed merger between grocery giants Albertsons and Kroger. The state's lawyers are drawing on previous grocery chain mergers and their negative implications to support their case. This lawsuit is one of three currently challenging the $24.6 billion deal, which was announced nearly two years ago.

Washington, where Albertsons and Kroger jointly own over 300 grocery stores, would face the greatest impact if the merger were to proceed. The merged entity would control more than half of grocery sales in the state. Recognizing the need for regulatory scrutiny, Albertsons and Kroger have proposed selling 579 overlapping stores, with 124 of them located in Washington - the highest number among the 19 states affected. However, concerns have arisen over the proposed buyer, C&S Wholesale Grocers, which has limited experience in running stores or pharmacies.

The state's attorney general's office aims to avoid a repeat of a decade ago when Albertsons acquired the Safeway chain. To address regulatory concerns regarding supermarket competition and consumer impact, Albertsons was compelled to sell 146 stores to Haggen, a small grocery chain based in Washington. However, Haggen struggled with the expansion, resulting in the closure of 127 stores, including 14 in Washington, and the loss of thousands of jobs. Eventually, Haggen sold its remaining stores back to Albertsons in 2016. Now, 10 Haggen stores in Washington are once again on the list to be sold if the Albertsons-Kroger merger proceeds.

The potential consequences of the merger, as highlighted by Washington Attorney General Bob Ferguson, extend beyond the state's borders. Ferguson seeks to block the merger nationwide, arguing that eliminating the robust competition between Albertsons and Kroger could lead to higher prices, reduced quality, and store closures. Albertsons and Kroger, on the other hand, contend that the merger would enable them to better compete against growing rivals like Walmart and Costco. They are currently attempting to have the case dismissed, claiming that a state court is not the appropriate venue for considering a nationwide ban.

Brad Weber, an antitrust law specialist from the law firm Locke Lord, explains that the Superior Court judge overseeing the case in Washington could choose to either halt the merger nationwide or limit the ruling to the state. The judge might also require the companies to make adjustments to their divestment plans in order to preserve competition. Alternatively, the judge could delay the case until a ruling is delivered by the U.S. District Court in Oregon, where the Federal Trade Commission (FTC) is currently seeking a temporary block on the merger.

Although Albertsons and Kroger assert that their proposed plans, including the sale of stores to C&S, would lead to lower grocery prices and maintain competition, Washington residents remain skeptical. The closure of an Albertsons store in the Birchwood neighborhood of Bellingham, which resulted in restricted food access for the community, is still vivid in the minds of residents. Tina McKim, a founding member of Birchwood Food Desert Fighters, expresses concern for the loss of unionized jobs and questions the necessity of a merger for Kroger and Albertsons to effectively compete with Walmart.

As the legal battle unfolds, Washington state hopes to protect its consumers and ensure a thriving and competitive grocery market. The outcome of this case will have far-reaching implications not just for Washington residents but also for the future landscape of grocery retail across the nation.