FTC Green Lights Albertsons Safeway Merger

The Federal Trade Commission (FTC) has greenlighted the mega merger between supermarket chains Albertsons and Safeway.

As a condition of the merger, Albertsons and Safeway will sell 168 supermarkets to settle FTC charges that their proposed $9.2 billion merger would likely be anticompetitive in 130 local markets in Arizona, California, Montana, Nevada, Oregon, Texas, Washington, and Wyoming.

Consumer groups blasted the FTC’s approval of the merger.


“The Federal Trade Commission (FTC) put the food industry ahead of consumers by refusing to block the biggest supermarket merger in history,” said Wenonah Hauter, executive director of Food & Water Watch. “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 FTC approved a divestiture plan that is simply inadequate to protect consumers,” Hauter said. “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 Deutsche Bank.”

“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,” Hauter said. “By failing to decisively break up the Albertsons-Safeway merger, the FTC is only encouraging a further cascade of supermarket mergers. Unless the Obama administration stands up to this merger-mania, the supermarket monopoly will tighten its grip on consumers.”

At the time the proposed acquisition was announced, Albertson’s LLC operated 630 supermarkets under the Albertsons banner in 15 states, and under the Market Street, Amigos, and United Supermarkets banners in Texas. New Albertson’s, Inc., operated 445 supermarkets under the Jewel-Osco, ACME, Shaw’s, and Star Market banners, in the eastern United States. Safeway operated 1,332 supermarkets under the Safeway, Tom Thumb, Randall’s, Pak ’n Save, The Market, Vons, Pavilions, and Genuardi’s banners located throughout the country.

Under the proposed settlement, Haggen Holdings, LLC will acquire 146 Albertsons and Safeway stores located in Arizona, California, Nevada, Oregon, and Washington; Supervalu Inc. will acquire two Albertsons stores in Washington; Associated Wholesale Grocers, Inc. will acquire 12 Albertsons and Safeway stores in Texas; and Associated Food Stores Inc. will acquire eight Albertsons and Safeway stores in Montana and Wyoming.

It is expected that Associated Wholesale Grocers, Inc. will assign its operating rights in the 12 Texas stores it is acquiring to RLS Supermarkets, LLC (doing business as Minyard Food Stores) and that Associated Food Stores Inc. will assign its rights in the eight Montana and Wyoming stores it is acquiring to Missoula Fresh Market LLC, Ridley’s Family Markets, Inc., and Stokes Inc.


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