ICLE Scholars on the Kroger-Albertsons Merger
Winsight Grocery Business – ICLE President Geoffrey Manne, Chief Economist Brian Albrecht, Director of Competition Policy Dirk Auer, and Senior Scholar Eric Fruits were cited extensively by Winsight Grocery Business in a story about an ICLE issue brief on issues with a potential Federal Trade Commission challenge to the merger of Kroger and Albertsons. You can read full piece here.
Accurately defining today’s grocery retail marketplace stands as one of five hurdles for the Federal Trade Commission (FTC) to surmount if it attempts to block the $24.6 billion deal, according to the International Center for Law & Economics (ICLE), a nonprofit, nonpartisan research group.
In a brief released Thursday, titled “Five Problems with a Potential FTC Challenge to the Kroger-Albertsons Merger,” Portland, Oregon-based ICLE said an FTC effort to halt the transaction would collide with the law “as it is currently enforced by U.S. courts.” Such a move would be unlikely to prevail in court because of failure to account for “dramatic changes in the retail food and grocery landscape,” the viability of store divestitures as an antitrust remedy “routinely accepted by courts,” and “speculative” claims about harm to the labor market and purchasing power, the group explained.
What’s more, the 19-page brief said the Kroger-Albertsons merger likely will be challenged, citing an “increasingly aggressive enforcement stance” against mergers and acquisitions by the FTC, including new merger guidelines proposed last week.
ICLE also points to the merging parties’ “apparent willingness to litigate the case,” which it said “makes the likelihood of a protracted legal battle high.” Indeed, back in May, The Kroger Co. Chairman and CEO Rodney McMullen said in a Bloomberg interview that his company—slated to acquire Albertsons Cos. under the mega-merger—was willing to pursue litigation if the deal is nixed by regulators.