On Monday, twenty-four members of the Alaska State Legislature wrote to Lina Khan, chair of the Federal Trade Commission, urging the federal government to block the Kroger-Albertsons grocery store merger. The $24.6 billion merger was first announced in the fall of 2022, and the Federal Trade Commission is currently evaluating the proposed sale. Last month, a spokesperson from Kroger announced they would divest 14 stores throughout Alaska to C&S Wholesale Grocers, the parent company for Grand Union and Piggly Wiggly grocery stores.
“Alaska is facing major uphill battles in recruiting and retaining skilled workers in all industries, while also struggling to keep residents in the state,” said Senator Cathy Giessel (R-Anchorage), Senate Majority Leader. “When you add on major store closures, decrease grocery options, and set the stage for antitrust practices in this state, it puts an additional strain on an economy that we are striving to improve for working Alaska families.”
State Senator Jesse Bjorkman, who was one of the 24 legislators who signed onto the letter to Khan, cited concerns over the merger’s affect on fair prices for groceries. “We want to make sure that the cost of food and groceries remains as low as possible and, with the reduction of sellers of those items, reduce competition almost always means higher prices.”
In September, local labor unions came out to oppose the merger, citing store closures, job losses, and lower wages and job standards. Additionally, Congresswoman Mary Peltola wrote a letter last month to the Federal Trade Commission calling on them to block the merger because of Alaska’s food security concerns. In Addition, Senator Lisa Murkowski and Senator Dan Sullivan also wrote a letter to Chair Khan on September 22 expressing their concerns about the possible merger, signaling that Alaskans are united on this matter.
“Alaskans are justifiably concerned that this potential merger will mean fewer grocery stores with even more expensive groceries on the shelves,” said Senator Murkowski. “Alaskans need to be confident that these uncertainties about access and price will be addressed.”
“Given that the Biden administration’s inflation-inducing policies have been driving up the cost of food, energy and interest rates to 40-year highs, Alaskans need to be assured that the proposed merger won’t impact local competition and increase prices for hard-working families who are trying to make ends meet in the Biden economy,” said Senator Sullivan.
“One of the basic functions of government is to provide opportunities and paths for success. We hope that Chair Khan and the Commission will embrace this fundamental value while considering the proposed merger and think about the impact to the Alaska economy and its citizens – from food security to quality employment where Alaskans can earn a living wage,” said Senator Bill Wielechowski (D-Anchorage). “We see no benefit to the residents of the state of Alaska with this merger, only increased hurdles.”
While acknowledging Kroger’s efforts to find a qualified buyer for closed stores, the letter references Alaska’s history with corporate mergers: “…Alaskans are leery, having already experienced prior grocery store mergers. In the late 1990s, Safeway purchased all locally owned Carrs grocery stores in the state, and despite the promise of continued employment and increased competition, they soon left the state. Alaska Marketplace purchased those closed stores and began business as a competitor to Safeway, but within a short period of time, the company closed, leaving many communities without competition.”
“Alaska is unique, and decisions made at the highest level can always be felt directly and harshly by Alaskans if our concerns are not taken into consideration. Alaska already has some of the highest food prices in the nation, especially when you consider many urban and rural areas are only accessed by air or water. This potential merger has the very real possibility to exacerbate this circumstance,” concluded Sen. Giessel.
