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Colorado’s lawsuit against Kroger-Albertsons merger completed
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Colorado’s lawsuit against Kroger-Albertsons merger completed

After nearly a month of testimony, Colorado’s lawsuit against mega-merger of supermarket giants Kroger And Albertsons It ended on Thursday. What happens next is still an open question.

The deal, which would be the largest supermarket merger in U.S. history, faces numerous legal challenges at both the state and federal levels from regulators and public officials who argue it would reduce competition in the grocery industry.

The fate of the merger is now in the hands of three separate courts. The Federal Trade Commission sought an injunction to block the deal in a district court in Portland, Oregon, during a hearing that ended last month. Washington state, meanwhile, completed its own separate lawsuit this week to stop the deal.

It is unclear which court will rule first. Denver District Court Judge Andrew J. Luxen did not give a timeline for when he would rule.

What’s going on with Kroger and Albertsons?

Kroger, Colorado’s largest grocer, owns King Soopers and City Market. Albertsons owns Safeway.

Colorado Attorney General Phil Weiser is suing to block the $25 billion merger, saying it would raise prices and be bad for shoppers. Kroger and Albertsons argue the merger is necessary to compete with companies like Amazon, Walmart and Costco.

The supermarket giants agreed to sell 579 stores nationwide to New Hampshire-based C&S Wholesale Grocers, including 91 stores in Colorado, in an effort to allay concerns that the combined company could create a monopoly in areas with significant overlap. If the deal goes through, C&S will take over Safeways in Colorado.

Here are a few highlights from the merger case that were reiterated during closing arguments:

The state argued that the divestiture plan with C&S Wholesale Grocers was doomed to fail. The AG’s office presented emails and text messages between C&S executives as evidence of the allegations showing that C&S was not committed to keeping the stores it acquired. Instead, the company intends to use the acquisition to bolster its much larger wholesale distribution business, which could lead to store closures, according to state prosecutors. C&S said it has no plans to close stores.

The state presented emails between company executives to support the allegation that Kroger and Albertsons signed illegal no-poaching and no-solicitation agreements while King Soopers workers were on strike in 2022. The state alleges that Kroger agreed not to hire Albertsons workers or pursue pharmacy customers during the strike.

The state argues that Coloradans who live in mountainous areas and already pay higher grocery prices could be further harmed if the merger goes through.

Kroger’s attorney argued that the company is focused on lowering its prices to compete with Walmart. A merger with Albertsons would give Kroger the scale it needs to further lower prices, according to the defense attorney. Kroger’s attorney also argued that the real monopolistic threats to consumers come from competitors such as Amazon, Walmart and Costco.

Kroger said it plans to reduce prices nationwide by $1 billion after the merger. That would involve $3 million a year at every store in Colorado, the attorney said.