There's little doubt a Kroger-Albertsons merger would hurt Chicago consumers
Burt Flickinger wrote a letter, published August 20, in support of the proposed Kroger-Albertsons merger, claiming that the "real losers," should the Federal Trade Commission succeed in blocking the merger, "will be customers and union workers." Flickinger points to another super-villain of the grocery industry, arguing that Kroger and Albertsons combined will better "compete with the Walmart behemoth."
The latter claim warrants some investigation. Walmart closed four of their Chicago stores just last year; according to the company's website, there are just eight stores still in the city. Much of Chicago, therefore, lacks access to Walmart, which indeed provides substantial value and low prices. Instead, those of us who live outside Walmart’s jurisdiction have just two options: Mariano's and Jewel-Osco. A successful merger of their two parent companies would deprive many Chicagoans of any choice whatsoever.
But what about divestiture? Kroger plans to sell many of the stores it operates in Chicago to C&S Wholesale Grocers, a company with little experience operating stores of this kind. And the last time Albertsons sold its grocery stores to appease the FTC (it was buying Safeway at the time), the stores’ buyer, Haggen Holdings, declared bankruptcy. Workers lost their jobs at the divested stores, and Albertsons reacquired many of the same stores it had sold to Haggen in what FTC Chair Lina Khan called a "spectacular" failure.
The FTC should therefore not approve this merger based on the assumption that Kroger and Albertsons are operating in good faith, as Flickinger suggests. There is little serious doubt, except perhaps by paid consultants, that the Kroger-Albertsons merger would dramatically reduce consumer choice, especially here in Chicago, and result in an uncertain future for the divested stores. Groceries are among the most fundamentally important purchases consumers regularly make, and we must not tolerate the gamesmanship by these two grocery giants in their efforts to extract more profit from our communities.
Daniel Kassl, Ravenswood
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