Attorneys for the state and for the Kroger and Albertsons grocery store chains wrapped up a trial Thursday over the businesses’ proposed $24.6 billion merger by disparaging one another’s knowledgeable witnesses and accusing the opposite of pushing an agenda that may hurt Colorado customers and employees.
Closing arguments capped a trial that began Oct. 1 and is the third one looking for to dam the merger of the grocery giants on grounds that it might drive up costs, scale back competitors and hurt prospects, employees and the shops’ native suppliers. The Federal Commerce Fee and attorneys basic for Colorado and Washington State filed lawsuits saying the merger would violate federal and state antitrust legal guidelines.
Denver District Choose Andrew J. Luxen will problem a ruling within the case, although on Thursday there was no time-frame for that call.
Colorado Lawyer Basic Phil Weiser filed the lawsuit in February to dam the merger after holding 19 city halls throughout the state to listen to from the general public. He has mentioned individuals have been overwhelmingly against the consolidation.
However Matt Wolf, the lawyer representing Kroger, accused the state of making an attempt to forestall his shopper from bringing decrease costs to Colorado customers and better pay to employees. Kroger has pledged to spend $1 billion a 12 months to extend wages and advantages and $1 billion a 12 months to decrease costs for patrons.
“The antitrust legal guidelines have been written to encourage, not impede, pro-consumer offers just like the one earlier than the courtroom,” Wolf mentioned. “Whereas Walmart, Costco and Amazon is perhaps happy with the state’s efforts in the present day, grocery customers pays extra and get much less if the state has its manner.”
Kroger CEO Rodney McMullen and Albertsons CEO Vivek Sankaran testified earlier this month that combining their corporations is one of the simplest ways for them to compete towards Walmart, the nation’s main grocer by way of gross sales, and different rising chains. In any other case, Sankaran mentioned Albertsons might need to put off staff and exit some markets to stay economically viable.
However attorneys for the state argued that the merger, which might be the most important grocery store consolidation in U.S. historical past, warned of retailer closures, job losses and better costs if the merger goes by way of. Kroger, which operates King Soopers and Metropolis Market shops in Colorado, and Albertsons Cos., which owns Safeway, compete head-to-head and collectively account for at the least 50% of all of the grocery gross sales in Colorado, based on the lawyer basic’s workplace.
A plan to promote 579 of the businesses’ shops to attempt to allay fears concerning the lack of competitors within the market received’t work as a result of the customer, C&S Wholesale Grocers, doesn’t have the assets or expertise to compete with Kroger after the merger, state lawyer Arthur Biller mentioned. C&S is a grocery distributor with few retail shops and has offered most of the shops it has acquired up to now, seeing the gross sales nearly as good for its distribution enterprise, he added.
“This makes C&S not solely a smaller competitor than Albertsons, however a worse competitor,” Biller mentioned.
In Colorado, the proposed divestiture would spin off 91 of the shops owned by Albertsons, a dairy plant and a distribution heart to C&S. Two Albertsons shops are on the listing of these to be offered and the remaining are beneath the Safeway banner.
As a part of the $2.9 billion cope with New Hampshire-based C&S, the Albertsons shops will retain the Safeway banner in Colorado. The distribution firm will have the ability to hold promoting a few of Albertsons private-label manufacturers. And regardless of testimony by a state witness on the contrary, C&S could have the personnel and assets in place to take over the shops, protection attorneys mentioned.
Roger Davidson, an trade guide and witness for the state, believes that shops purchased by C&S will see declining income and a few will seemingly shut. He testified earlier that C&S doesn’t have the “retail spine” or personnel to compete with Kroger.
Throughout closing arguments, lawyer Wolf disputed Davidson’s findings and accused him of mendacity about his educational credentials and having a battle of curiosity due to his enterprise connections. He additionally assailed an evaluation by one other state witness, Nitin Dua, whose testimony performed down Costco, Amazon and different nationwide chains as critical opponents to Kroger and Albertsons.
Biller criticized modeling by a protection knowledgeable witness on opponents as unstable, producing “absurd outcomes.”
Additionally at problem within the lawsuit is a $1 million civil penalty that Weiser is looking for from every grocer for what he calls no-poach and non-solicitation agreements throughout a 2022 strike towards King Soopers. He mentioned his workplace discovered emails whereas going by way of paperwork displaying that Albertsons agreed to not rent any King Soopers staff or solicit its rival’s pharmacy prospects in the course of the strike.
The 2 corporations have mentioned no such settlement existed.
The United Meals and Business Staff Native 7, which represents grocery employees in Colorado and Wyoming, is a part of a coalition of unions combating the merger, which was introduced in 2022.
Albertsons and Kroger executives mentioned shops received’t be closed and frontline employees received’t lose their jobs if the merger is permitted. However union members observe the fallout from Albertsons’ buy of Safeway in 2015. Haggen Meals and Pharmacy, a small grocery store chain based mostly in Washington state, purchased among the shops and in lower than a 12 months filed for chapter. Greater than 100 shops and hundreds of employees misplaced their jobs.
A call is pending in a trial in Oregon during which the Federal Commerce Fee sued to dam the merger till it could actually resolve its administrative criticism towards Kroger and Albertsons. The attorneys basic of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming joined the lawsuit.
The choose within the Washington state case is predicted to problem a ruling throughout a Nov. 15 listening to.
Get extra enterprise information by signing up for our Financial system Now publication.
Initially Printed: