Grocery Merger Raises Red Flags for Produce Groups

Multiple organizations representing the fresh produce industry are raising concerns about a potential retail grocery merger. The groups assert that a merger between Kroger and Albertsons would have substantial consequences for the entire food supply chain. Most notably, the merger would be harmful to fresh produce suppliers. The organizations recently submitted a letter to Federal Trade Commission (FTC) Chair Lina Khan, outlining the impact a merger between Kroger and Albertsons would have.

“The Kroger-Albertsons merger is anticompetitive and will harm the fresh produce industry, farmworkers and farm communities, consumers, and threaten national security,” the letter states. “if this deal is granted approval by the FTC, suppliers of fresh produce will be harmed by shrinking competition among retailer buyers since the newly combined entity would have significantly more leverage over the growers and shippers that feed the nation. This will not only reduce farmers’ margins and pressure them to cut back on acreage, but also have negative impact on farmworker jobs and income.”

Signatories of the letter include Western Growers, the California Fresh Fruit Association, and Colorado Fruit & Vegetable Growers Association. The groups point out that the buying power of a new combined entity would have far too much influence over prices, as Albertsons and Kroger combine for more than 15 percent of the U.S. grocery market share. The organizations assert that a combined Kroger-Albertsons would be able to move such a large volume of product, it increases the likelihood of lower prices offered to suppliers, opening the doors to increased imports.

Along with growers and suppliers, the organizations note how a retail grocery merger of this magnitude would negatively impact consumers. “Eliminating major competitors from the marketplace never leads to reduced prices for the consumer. Rather, food costs – already under pressure by high inflation – will only go up if this mega-merger is permitted to proceed,” the letter states.