FTC suit to stop Krogers-Albertsons Merger would harm consumers
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The Federal Trade Commission (FTC) today sued to stop the proposed merger between grocers Kroger and Albertsons. The FTC claims the merger would lead to less competition and higher prices for consumers.
Director of CEI’s Center for Technology and Innovation Jessica Melugin said:
“The idea that this market is uncompetitive is preposterous. Recent years have seen Amazon with its Whole Foods and Walmart enter the competition, not just as additional players but with innovations like home delivery or curbside pick-up. The FTC using its limited resources to block this merger is purely ideological and of no benefit to consumers, already struggling with food costs.”
CEI senior economist Ryan Young said:
“FTC leadership needs a refresher course in inflation economics. Food prices are up 22 percent since the great COVID inflation began in May 2020. Overall prices are up by 21 percent. The difference is barely distinguishable. Over the past year, food prices have gone up less than inflation, at 2.6 percent for food against 3.1 percent for overall prices. Electricity, shelter, and transportation prices are all going up faster than food prices, and faster than overall inflation.
“Runaway stimulus from the Federal Reserve and from leaders of both political parties caused the great COVID inflation. Politicians did more to raise grocery prices than any corporate executive could dream of.
“The FTC’s ideological need to have a business villain has made them forget to check what might actually be causing prices to go up.”
CEI research fellow Alex Reinauer said:
“In addition to being better equipped to compete against grocery store leader Walmart, the merger would give Kroger and Albertsons better footing to compete in the prescription drugs market. CVS and Walgreens are the leading pharmacies with about 25 percent and 15 percent of the market, respectively. Kroger and Albertson combined would account for less than 5 percent of the prescription drugs market. Patients would ultimately benefit from this increased competition. Unfortunately, the FTC is more worried about the central planning of the economy, not about the health and pocketbooks of Americans.”
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