Colorado attorney general suing Kroger, Albertson’s and C&S Wholesalers over merger
DENVER, Colo. (KRDO) - Colorado Attorney General Phil Weiser announced Wednesday that he has filed a lawsuit against Albertson's, Kroger and C&S Wholesalers on behalf of the people of Colorado over the supermarket giants' merger on Wednesday. In the news conference, Weiser announced that it was only after months of investigating and hearing from people in rural communities that he decided it needed to happen.
The lawsuit intends to block the merger and pursue punitive measures against agreements the companies had entered into that violated the law. He claims his investigation produced evidence that the two companies previously entered into an illegal "no-poach" agreement that didn't allow either supermarket giant to hire each other's employees during emerging worker strikes.
"We are seeking to prevent this merger from taking place, and we are pursuing civil penalties and injunctive relief in connection with another violation of Colorado's antitrust laws," Weiser said Wednesday.
He said the merger would negatively impact suppliers, consumers, and employees alike, creating a monopoly on supermarkets in Colorado, leading to increasing grocery store prices and lowering the wages of workers, as well as impacting supply chains.
"In Colorado, we have antitrust anti-monopoly legislation," explained Colorado Springs attorney Jeremy Loew, "and what that says is that you cannot control the market. There has to be some competition. You can't buy out your competition."
Kroger owns the "King Soopers" branding in Colorado, and Albertson's owns the "Safeway" branding, both of which make up a large percentage of the supermarket market in Colorado. Combining the two brands, according to the Attorney General, would create a monopoly.
Loew, however, says that the threshold at which a market monopoly is measured depends on the court's decision.
"You're going to look at everything, all the communities, and say, is this fair and just for the consumer?," Loew said.
The lawsuit has been filed in the state court system. Loew said that it could become a "test case," something that the Colorado court system has a history of producing.
At least one other state, Washington, has already filed its own lawsuit on similar grounds.
Loew says that if the Colorado Attorney General wins this case, it could give other states a foundation to sue those companies for violating anti-trust laws, as well as confidence they could win.
"It's going to be a signal to the rest of the states, maybe some of the big ones like California and New York and Texas and Florida that really can break up this merger," Loew said.
KRDO reached out to Kroger and Albertson's for comment. Neither company has immediately replied.
