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Lawsuit against Kroger and Albertsons merger should now make for a better deal, or no deal at all

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Now that the Federal Trade Commission and nine attorneys general have filed to block the merger of supermarket giants Kroger and Albertsons, the public will get a much-needed closer look at a deal that would impact millions of consumers and tens of thousands of grocery workers.

The FTC and attorneys general from eight states, including Illinois, and Washington, D.C., filed the lawsuit on Monday. The head of the FTC’s Bureau of Competition warned — as you might expect — of higher food prices and lower product quality for shoppers, and lower wages, fewer benefits and deteriorating working conditions for workers if the $24.6 billion deal between the nation’s two largest supermarket chains goes through.

In the Chicago area, Kroger owns Mariano’s and Food 4 Less, while Jewel is owned by Albertsons. The two chains operate in three dozen states now, but the merger would give them control over some 5,000 stores in 48 states.

Clearly, shoppers and workers have reason to be concerned, though it’s still too early to say what the outcome of the lawsuit might, or should, be. But the suit will force details out into the open, for the public to judge the merits for themselves.

For those interested in the fine print, here’s a couple of tidbits from the FTC’s press release: Kroger and Albertsons executives have admitted that they now offer lower prices, better products, better pay and more benefits because of — you guessed it — competition. They’ve also admitted that the merger — technically, an acquisition of Albertsons by the larger Kroger — “is anticompetitive, with one executive reacting candidly to the proposed deal: ‘You are basically creating a monopoly in grocery with the merger.’ ”

For their part, Kroger and Albertsons have a point when, in arguing for the merger, they note that the grocery business has changed. The two chains are facing stiff competition from non-grocer retailers like Walmart that also sell food and other items that were traditionally found at the local supermarket. Who among us hasn’t bought frozen vegetables or detergent at, say, Costco or Target or maybe even a dollar store rather than at Jewel? The competitive landscape is indeed different these days.

To make the deal work, Kroger and Albertsons have proposed divesting themselves of hundreds of stores, spinning them off to another grocery chain; the FTC says the offer thus far isn’t enough.

The lawsuit got the ball rolling. Maybe the merger can be done right. But if the price is too high for consumers and workers to pay, don’t get it done at all.

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