FTC attempts to block Kroger's acquisition of Albertsons
UC economics professor tells WLWT it's uncertain whether the merger would lower costs for consumers
Kroger's attempt to purchase rival grocery chain Albertsons is in limbo, with the Federal Trade Commission attempting to block the proposed merger, WLWT reported.
David Brasington, PhD, James C. and Caroline Kautz Chair in Political Economy and professor of economics
The FTC has filed a federal lawsuit and launched an administrative proceeding against the deal, arguing it would “substantially lessen competition” and lead to higher grocery prices.
“The environment for businesses is that you really have to fight the FTC to have a merger,” said David Brasington, PhD, the James C. and Caroline Kautz Chair in Political Economy and economics professor in the University of Cincinnati's Carl H. Lindner College of Business.
While the government said the consolidation would lead to higher prices for consumers, Cincinnati-based Kroger said the company plans to reduce prices and increase wages and benefits for its employees after the deal is closed.
Whether the larger company would actually cut costs is uncertain, Brasington said.
“So, will the Kroger and Albertsons merger lead to economies of scale? And the promised cost cuttings — the price cuttings that Kroger has said? It's an empirical question,” he said. “We don't know yet.”
Featured image at top: Exterior of a Kroger store. Photo/Andrew Higley/UC Marketing + Brand
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