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BoiseDev, which happens to based in Albertsons' hometown, has a piece in which it analyzes potential obstacles to Kroger's proposed $24.6 billion acquisition of Albertsons.

Here's how it frames the story:

"In the long sprint toward completing a proposed acquisition of Boise-based Albertsons, Kroger faces new hurdles: three federal agencies announced two separate actions that could impact the proposed deal. And, President Joe Biden took aim at a lack of competition in the grocery industry as it exists today – including the two grocery companies.

"Kroger hopes to buy Albertsons in a $24.6 billion deal. It would put together the nation’s two largest standalone grocery chains (Kroger owns Fred Meyer, among other chains), with somewhere between 4,000 and 5,000 locations under one corporate command. The chains claim it will lower prices and help them better compete with Walmart and Amazon.

"Last week, the two federal agencies published new guidelines for mergers and acquisitions - new, tighter guidelines. The proposed rules put forth 13 guidelines for merger reviews, and after a 60-day comment period, would go into effect - and impact the Albertsons/Kroger review.

"The principles include 'mergers should not significantly increase concentration in highly concentrated markets,' 'should not eliminate competition between firms,' 'should not entrench or extend a dominant position,' 'should not further a trend toward concentration,' and others."

In addition, the story says, "Without saying their names, President Joe Biden appeared to reference Albertsons & Kroger in remarks on the new framework.

"'The Department of Agriculture… is ramping up enforcement of antitrust and consumer protection laws in food and in agriculture,' Biden said. 'For example, just four supermarket companies control over a third of the market nationwide.'

"Those four companies appear to be Walmart, Kroger, Albertsons, and Ahold Delhaize - which together hold 40% market share."

KC's View:

It would appear that the pieces are being put in place at the regulatory level to offer an argument that the Kroger-Albertsons deal violates some of the stated guidelines.  Unless I'm wrong, it would significantly increase concentration in highly concentrated markets, will eliminate competition between firms, and will further a trend toward concentration.

Now, Kroger and Albertsons will argue that they need to merge in order to compete with Walmart and Amazon.  Which almost sounds like the companies and the government will be arguing past each other, not with each other.

I do think, as I have said here before, that Kroger and Albertsons need to regain control of the narrative.  They need to tell their story more often and with greater precision.  (Rodney McMullen and Vivek Sankaran are welcome to come back on MNB anytime.)