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Colorado suing over supermarket merger

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(The Center Square) – Colorado is suing to stop a merger between the companies that own King Soopers and Safeway, the two largest supermarket chains in the state.

Attorney General Phil Weiser, who filed a complaint and motion for preliminary injunction against the merger on Wednesday in Denver District Court, argues the $24.6 billion merger between Kroger and Albertsons would harm consumers. Kroger owns chains King Soopers and City Market, and Albertsons owns Safeway.

“Coloradans are concerned about undue consolidation and its harmful impacts on consumers, workers, and suppliers,” Weiser said in a statement. “After 19 town halls across the state, I am convinced that Coloradans think this merger between the two supermarket chains would lead to stores closing, higher prices, fewer jobs, worse customer service, and less resilient supply chains.”

The state also alleges Kroger and Albertsons had an agreement that Safeway would not poach any of King Soopers’ workers during strikes in 2022, which violates state antitrust law.

“The unlawful No-Poach Agreement diminished competition in the labor market and harmed employees who were deprived of access to job opportunities during the strike against King Soopers,” says the complaint, which requests $1 million from each company for violating the state’s antitrust law.

Weiser also criticized Kroger’s plan to divest 413 stores nationally to C&S Wholesale Grocers – which would include 50 Safeway locations in Colorado – as “inadequate,” citing the Albertsons/Safeway divestiture.

“Our conclusion in this case – and our skepticism about the proposed divestiture – is strongly supported by what happened in the Albertsons/Safeway merger, where stores closed, jobs were lost, consumers suffered, and the divestiture failed miserably to preserve competition,” Weiser said. “We won’t risk another such failed divestiture and we will fight hard to preserve competition for consumers, workers, and suppliers, all of whom have raised serious concerns about the remedy proposed in this case.”

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