Kroger and Albertsons CEOs Testify in Ongoing Antitrust Case

McMullen argued that the merger would enable the combined companies to lower prices for consumers and create corporate jobs in Portland, as reported by the Oregonian.

The case, initiated in February by the Federal Trade Commission (FTC) and nine state attorneys general, is overseen by U.S. District Court Judge Adrienne Nelson. McMullen expressed admiration for the company that Sankaran has built, stating, “Albertsons does some things better than Kroger that we can always learn from.” However, reports detailing Sankaran’s testimony from the hearing were not available at the time of publication.

The trial, which began on August 26, has garnered significant media attention, particularly due to the FTC’s allegations that Kroger has engaged in price gouging for essential products such as eggs and milk. Last week, the FTC presented an email from Kroger Senior Director of Pricing Andy Groff, revealing that the grocery chain raised egg and milk prices at rates significantly higher than inflation.

Kroger has denied any wrongdoing, stating in an email to Supermarket News that the FTC “cherry-picked” the email and that it does not reflect the company’s overall strategy to reduce prices for customers. A Kroger spokesperson emphasized that the retailer’s prices account for various operational costs, including labor, transportation, and advertising, many of which have risen since 2020. “Kroger’s pricing decisions are impacted by factors beyond inflation,” the spokesperson added.

The FTC has further contended that Kroger and Albertsons, as the two largest pure-play supermarket companies in the U.S., view each other as their primary competitors. Both grocers have downplayed this notion, asserting that larger retail competitors like Walmart, Amazon, and Costco pose a more significant threat.

According to the Oregonian, during the second day of the trial, the FTC revealed an email from Todd Kammeyer, president of Kroger-owned Fred Meyer, expressing concern over a plan to discontinue circulars because Albertsons continued to distribute them. Kammeyer noted in his email, “They are our biggest competitors, with 300-plus stores.”

Additionally, the FTC has raised concerns about how the acquisition could negatively affect the more than 700,000 union workers employed by both grocery chains, who often leverage the competition between the two in collective bargaining.

On August 28, thousands of Fred Meyer grocery and meat department workers in Portland went on strike over stalled contract negotiations and allegations of unfair labor practices. The strike concluded on September 3, with the union declaring the action a “win for our membership.” UFCW Local 555 communications coordinator Miles Eshaia remarked, “Fred Meyer was held accountable, and the company now understands just how many of its workers are committed to change.”

Union President Dan Clay called on Fred Meyer to adhere to the law, prioritize employee welfare, and cease price gouging practices within the community, particularly in light of developments from the FTC case. Contract negotiations are ongoing and are expected to resume toward the end of the trial on September 11 and 12.

Meanwhile, the FTC is investigating allegations that Albertsons executives destroyed evidence following the 2022 announcement of the merger with Kroger. According to a court document filed on August 16, the FTC directed both companies to “cease all document destruction activities with respect to matters that may be of relevance to this investigation.”

The FTC has accused four Albertsons executives, including CEO Vivek Sankaran, of destroying text messages discussing the merger proposal. On Tuesday, Colorado Division President Todd Broderick stated that while he might have deleted texts, he did not do so intentionally. The text exchange in question, which discussed the potential for price increases post-merger, included comments from another executive but lacked Broderick’s input, which had been deleted, according to the FTC.