The Federal Trade Commission (FTC) put the food industry ahead of consumers by refusing to block the biggest supermarket merger in history. The FTC allowed the Albertsons-Safeway merger to go through almost completely unobstructed after the chains divested a paltry number of grocery stores in a handful of cities.
The merger creates the third
largest grocery retailer (behind Walmart and Kroger) and leaves
supermarket shoppers vulnerable to price gouging.
The FT approved a divestiture plan that is simply inadequate to
protect consumers. It largely permits supermarkets to tighten their
stranglehold on consumers at a time of rising grocery prices and
stagnant wages. Albertsons and Safeway agreed to shed a modest 7 percent
of their combined 2,400 stores.
The FTC did not require the chains to
divest a single store in twenty metropolitan areas where the merger
combined local rivals. In these markets, the four largest retailers will
sell two-thirds of all groceries, and 12 million consumers will face
higher prices and reduced choices.
Even in the areas where stores will be sold, the divestiture plan is
unlikely to protect consumers. The merger entrenches Albertsons as the
biggest grocer in 13 markets and the second biggest in six more,
controlling about one-fifth of grocery sales, according to figures from
The FTC should have blocked this supermarket mega-merger.
Unfortunately, the FTC abandoned its mission to protect consumers and
allowed continued consolidation of the grocery industry, increasing the
power these grocery store goliaths have over consumers and their food.
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