The proposed merger between the grocery chains Albertsons and Kroger has antitrust laws in the spotlight, as the supermarket companies are already the two largest in the country.
Albertsons has more than 2,000 stores; Kroger has more than 2,700. In Tennessee, there are 121 Kroger stores with more than 18,000 workers. Since the merger plan was first announced in October, it’s been under intense scrutiny.
Stacy Mitchell, co-director of the Institute for Local Self-Reliance, said the grocery industry is already consolidated, which affects workers, farmers, small businesses and consumers.
“We’ve seen food production workers and farmers getting paid less for food, and we see consumers paying more for groceries,” Mitchell pointed out. “What’s happening is that you’ve got this small number of companies in the middle — the middlemen, including the supermarket chains — who are absorbing more and more spending for themselves, becoming incredibly profitable.”
Ohio-based Kroger has stated in a news release its acquisition of Idaho-based Albertsons would “expand customer reach and improve access to affordable food” to about 85 million households. The deal still requires Federal Trade Commission approval, which is expected to be decided next year.
Sen. Marsha Blackburn, R-Tenn., who serves on the Senate Judiciary Committee, spoke at a hearing on the merger. She questioned how Kroger would follow through with its $500 million claim to lower prices. Blackburn added the merger cannot help but affect communities with small grocery stores in rural Tennessee.
“I’ve recently visited with some independent grocers in Tennessee to walk through a store, see what the problems are,” Blackburn stated. “These ‘food deserts’ that would exist, it is independent grocers that are filling those. And competition is an important part of that.”
In the meantime, Congress has proposed some significant antitrust legislation. One bill would charge companies more to review mega-transactions, so federal agencies could hire enough staff to conduct a proper review. It has bipartisan support as it has passed the House but is sitting in the Senate.
Photo: Some 21% of Tennessee’s population lives in areas considered “food deserts,” including 15% in urban areas and 6% in rural areas, according to the Tennessee Access to Affordable Healthy Food Report. (WavebreakmediaMicro/Adobe Stock)