Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) despatched a letter to Federal Commerce Fee Chair Lina Khan on Tuesday, asking that the regulator oppose the merger between grocery giants Kroger and Albertsons.
The progressive politicians argued that the proposed $25 billion deal would result in larger costs and decrease wages, hurting consumers and staff alike. Kroger and Albertsons are two of the biggest grocery chains within the nation.
“Kroger’s and Albertsons’ histories of aggressive profiteering throughout the pandemic current a harmful roadmap for a way a bigger and extra highly effective firm would act if this acquisition had been allowed to proceed,” Warren and Sanders wrote.
The lawmakers went on to name each corporations “anticompetitive and antiworker.”
“The FTC ought to, when evaluating the influence of a possible merger, study Kroger’s and Albertsons’ data of raking in earnings and offering large payouts for executives and large shareholders whereas placing their frontline staff in danger,” they wrote.
Warren and Sanders had been joined on the letter by Rep. Jan Schakowsky, an Illinois Democrat. (Learn the complete letter beneath.)
Kroger and Albertsons have a mixed 5,000 shops and 710,000 staff within the U.S., with dozens of chains between them, resembling Fred Meyer and Ralphs (Kroger) and Safeway and Jewel-Osco (Albertsons).
Staff at many shops underneath each corporations are represented by the United Meals and Business Staff union. At the very least 4 associates of that union have come out in opposition to the merger, saying they’ve issues about retailer closures and layoffs. One Kroger employee lately instructed Reuters: “I want they might put their cash towards attempting to decrease costs and enhance wages, slightly than gobbling up the competitors.”
The boards of each corporations unanimously authorised the proposed deal, saying it might assist them compete with giant rivals like Walmart and Amazon. Kroger CEO Rodney McMullen argued in a joint assertion with Albertsons that collectively they might “construct a extra equitable and sustainable meals system.” He additionally famous the deal would “generate larger returns for our shareholders.”
Of their letter, Warren and Sanders pointed to a survey of 10,000 Kroger staff performed by the nonprofit Financial Roundtable final 12 months on the request of the UFCW. The authors discovered that “the residing and dealing circumstances of Kroger staff have declined markedly over the previous 20 years,” leaving greater than three-quarters of the corporate’s workforce food-insecure.
“These staff can’t afford balanced and wholesome meals,” the report’s authors wrote. “They run out of meals earlier than the top of the month, skip meals, and are hungry typically. These with youngsters report they go hungry to offer meals and different necessities for his or her youngsters. Kroger staff’ exceptionally excessive price of meals insecurity is seven occasions larger than the U.S. common.”
The authors additionally blasted Kroger for ending its “hero pay” program, which paid a $2-per-hour bonus for working throughout the pandemic, after just some weeks throughout 2020.
Sanders beforehand stated that permitting the businesses to merge can be “an absolute catastrophe.”
Kroger and Albertsons would wish FTC approval to maneuver forward with the deal, and the company is anticipated to take an in depth have a look at the way it might have an effect on native markets. The businesses are already getting ready to divest a number of hundred shops in sure areas the place they anticipate the company would decide that the merged entity can be too highly effective.
Khan, a Biden appointee, has rankled enterprise leaders together with her scrutiny of mergers since arriving on the fee in 2021. This previous fiscal 12 months, the fee issued extra letters of investigation associated to mergers than in every other 12 months of the previous decade, The Wall Avenue Journal lately reported.
“In all too many areas of our financial system, together with agriculture, airways, well being care, we’ve seen important consolidation and discount of competitors,” Khan stated in an interview with the Journal. “Mergers have performed a task in that.”