In the face of considerable opposition, litigation and scrutiny by the Federal Trade Commission, Vivek Sankaran, CEO of Albertsons Company and Rodney McMullen CEO of the Kroger Company published a letter in the Cincinnati Enquirer relating to the merger.

The letter was intended to placate opponents by dispelling myths concerning the intended transaction including: -

• Kroger has committed to zero store closures, although it is recognized that many stores will be divested as a prerequisite to federal approval.

• Both companies have committed to retaining frontline workers following the merger.  The average hourly wage of Kroger workers is $23.50 with liberal fringe benefits including education assistance.  The comments did not, however, address the issue of reducing head count at administrative and managemental levels with obvious redundancies following the merger of the companies.

• The CEOs specifically addressed the question of buying power and “squeezing farmers”.  It is easy and somewhat disingenuous to state, “Farmers are the backbone of our business and help put fresh, affordable food on family tables.”  It is inevitable that the merger will result in a vastly expanded Kroger Company to be able to negotiate from a position of even greater strength than at present.

The recent formation of the EggPro marketing Cooperative is an obvious approach to counter the power of progressively fewer and larger regional and national chains.