The proposed merger between the grocery chains Albertsons and Kroger has antitrust laws in the spotlight, as the supermarket companies are already the two largest in the country.
Danielle Smith
Albertsons has more than 2,000 stores; Kroger has more than 2,700. There are 32 Kroger stores in Arkansas, with more than 4,000 employees. Since the merger plan was first announced in October, it's been under intense scrutiny.
Stacy Mitchell, co-director of the Institute for Local Self-Reliance, said the grocery industry is already consolidated, which affects workers, farmers, small businesses and consumers.
"We've seen food production workers and farmers getting paid less for food, and we see consumers paying more for groceries," Mitchell pointed out. "What's happening is that you've got this small number of companies in the middle -- the middlemen, including the supermarket chains -- who are absorbing more and more of that spending for themselves, becoming incredibly profitable."
Ohio-based Kroger has stated in a news release its acquisition of Idaho-based Albertsons would "expand customer reach and improve access to affordable food" to about 85 million households. The deal still requires Federal Trade Commission approval. A decision is expected next year.
Mitchell thinks the consolidation of supermarkets is harmful to rural areas, which depend more on small and mid-sized businesses for their local economies. She predicts the merger will leave many communities with no competition in the way of choice for grocery shoppers.
"Rural areas have been particularly hard hit by that," Mitchell noted. "If you're a small town, you don't have a corporate headquarters of a giant company, right? You rely, naturally, on some smaller businesses. And those businesses have really been hurt and squeezed by the monopoly problem that we're seeing."
Mitchell added Congress has proposed some significant antitrust legislation. One bill would charge companies more to review mega-transactions, so federal agencies could hire enough staff to conduct a proper review. It has got bipartisan support and passed the House, but is sitting in the Senate.
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