Phil Weiser, Attorney General of Colorado has filed a lawsuit against Kroger and Albertsons alleging contravention of the Colorado State Antitrust Act.  At issue is an apparent “non-poach agreement” that was entered into after a 10-day strike by workers at King Soopers, a Kroger banner during January 2022.  Consumers were obliged to obtain pharmaceutical and other requirements from competitor, Safeway during the strike.  It is also alleged that the two companies agreed not to solicit pharmacy customers.  The State of Colorado is seeking $1 million in civil penalties as a result of the agreements that the state alleges harmed workers and “blatantly violated antitrust law”.

Attorney General Weiser is also suing to block the proposed merger between Kroger and Albertsons based on the reality that it would reduce competition and ultimately result in both inconvenience and higher prices for consumers.  Kroger operates 148 King Soopers and City Market stores in Colorado with Albertsons owning 105 Safeway and Albertsons stores.

There is considerable skepticism over the viability of the proposed spin-off of over 400 stores to C&S Wholesale Grocers. This is based on the debacle following divestment of 168 stores as a condition for the 2015 merger between Safeway and Albertsons. The acquirer, Haggen was overwhelmed and filed for bankruptcy within a year.  Albertsons then bought back the stores at a low price and many were closed.  Attorney General Wiser predicts that a similar situation will occur if C&S Wholesale Grocers that currently operates 23 stores finds itself responsible for 413 locations divested following the combination of Kroger and Albertsons.  Of the designated units, 50 Safeway and 2 Albertsons stores are located in Colorado.

In the event that the transaction is completed, and the combined company shuts either of the two banners in any small town, consumers would have no choice other than to drive considerable distances to a competing grocery chain.

Currently the Federal Trade Commission is evaluating the proposed merger but has delayed a ruling for many months while Kroger is actively planning the merger of the two companies in a $25 billion transaction.