March 28, 2024


“FTC must actively pursue a policy of prioritizing the sale of divested stores to multiple local independent grocery stores.”

WASHINGTON — Today, Representatives Lou Correa (D-CA) and Thomas Massie (R-KY), Ranking Member and Chairman of the House Administrative State, Regulatory Reform, and Antitrust Subcommittee respectively, sent a bipartisan letter urging Federal Trade Commission (FTC) Chair Lina Khan to protect small, independent grocers should the FTC consider divestiture options to resolve its effort to block the Kroger Company’s acquisition of the Albertsons Companies, Inc.

Historically, FTC has viewed divestiture—in this case, the selling off stores to a competitor—as a remedy to quell concerns of monopolistic activity in specific geographical markets, as was the case in Albertsons’ acquisition of Safeway in 2015, in which it divested 150 stores to Haggen Holdings LLC. The Ranking Member and Chair caution that “divesting to one entity,” like was done in 2015, “without the proper incentives or ability to maintain the stores has proven highly problematic.”

In fact, “within months of the sale, the stores were sold, leaving Haggen bankrupt and approximately 100 of the stores shuttered.” In the end, Albertsons was able to buy back many of those divested stores, undermining the goal of maintaining competition. “The divestiture to a single entity ultimately yielded no competitive benefit, but harmed many communities depending on those permanently closed stores,” they contend.

There are more than 21,500 independent grocers throughout the country, directly employing 1.15 million workers, generating $250 million in sales, and paying over $36 million in taxes, that are critical drivers of competition, economic growth, and jobs in American communities. As such, Correa and Massie request that, should FTC pursue divestiture as a remedy to the Kroger-Albertsons merger, they do so to prevent harm to markets, competition, workers, and communities by giving small, independent grocers first-dibs at buying any proposed divested assets.

“In scrutinizing the proposed merger, FTC should require that if divestiture is deemed the appropriate remedy in this case, independent local stores must first be provided the opportunity to purchase the divested stores,” they conclude. “As we have seen with recent mergers in the retail grocery market, when divestiture is concentrated in a single entity, it can lead to further consolidation and harm to vulnerable communities.”

You can read the full text of this letter HERE.