OPINION: Attorney General’s Silence on Kroger-Albertsons Merger Is a Failure for Alaskans

By Veri di Suvero and Bruce Botelho

Updated: 47 a few minutes ago Published: 47 a few minutes ago

The parent companies of Alaska’s two largest grocery chains, Kroger (Fred Meyer) and Albertsons (Carrs/Safeway), have proposed a merger that could result in the closure of nearly a third of Alaska’s grocery stores across the state, and our attorney general is doing nothing about it.

We care about all Alaskan consumers and Alaskan food security. Given our decades of experience fighting special financial interests on behalf of Alaskans, we are alarmed by the proposed merger between Kroger and Albertsons.

A proceeding has been opened in U.S. District Court to determine whether the Federal Trade Commission’s attempt to block the Kroger-Albertsons merger will succeed. Attorneys general from nine states, including Wyoming, have joined the FTC’s complaint to block the megamerger between grocery giants Kroger and Albertsons. Two others have filed separate lawsuits to protect consumers and prevent grocery monopolies in their states.

Alaska is poised to become one of the states hardest hit by the Kroger-Albertsons merger, but Alaska Attorney General Treg Taylor has not taken part in this lawsuit—instead, he is simply “watching.” By his inaction, he is failing Alaskans.

In its complaint, the FTC warns that the merger will reduce competition in the nationwide grocery industry, potentially leading to higher prices, less choice and job losses. It also argues forcefully that the mega-corporations’ proposed solution – spinning off hundreds of stores – is unlikely to succeed.

Eighteen stores in Alaska, including all Carrs stores and all Safeways in Anchorage and Fairbanks, are to be sold to C&S, a New Hampshire-based wholesaler. Running a grocery store in Alaska is difficult, even for those with a long history in the industry. But not only does C&S completely lack experience and an existing supply chain in Alaska, it has no strong portfolio or experience in grocery retail anywhere. Nationally, C&S currently operates 23 grocery stores, primarily in Wisconsin and New York, and “has spent the last decade trying to avoid being a supermarket operator,” according to the FTC. Previously, from 2001 to 2012, it acquired 370 grocery stores, but by November 2012, it had only three.

The record speaks for itself: Alaskans cannot count on C&S.

Alaska has been there before. The lawsuit filed by AKPIRG to block the Carrs-Safeway merger in 1999 was eventually settled by the sale of seven stores to Northwest Retail Ventures, a company with a similar track record to C&S. All seven stores closed within a year.

This time, with nearly three times as many stores at risk of being split, it is imperative that Attorney General Taylor not ignore the lessons learned from the Carrs-Safeway merger. AKPIRG advocated for a citizen advisory board as part of the 1999 deal. But a non-binding board cannot solve supply chain problems. We need an entity with real legal power, like the Alaska Attorney General, to step in.

One of the failures of the 1999 merger was accepting a national company that had extensive supply chain experience but little experience in grocery retail and none in Alaska.

We must not repeat these mistakes. These issues are being decided nationally. How can sitting back and watching developments help ensure that Alaska has a role in shaping the outcomes?

Alaskans can’t afford to let these mega-corporations play Monopoly with our food security. If this deal goes through, C&S will acquire 579 stores across the country. If their 18 new stores in Alaska fail, it will be a drop in the bucket for them, but it represents nearly a third of our grocery stores in major centers.

The Attorney General’s duty is to represent the people of Alaska and to vigorously advocate for consumer protection. By remaining silent on the Kroger-Albertsons merger, Attorney General Taylor is failing in his duty. Instead of spending state resources on culture war lawsuits that do not economically benefit Alaskans, Attorney General Taylor should come off the sidelines and sit at the table with the FTC to prevent a grocery monopoly in our state.

Attorney General Taylor said Alaska could join Wyoming and other states “later,” but now is not the time to sit back and do nothing. Now is the time to support the FTC’s lawsuit.

Truth of Suvero is the Executive Director of AKPIRG, Alaska’s only nonprofit consumer advocacy organization with a 50-year legacy of consumer and public interest advocacy. Bruce Botelho He served as Alaska’s attorney general for two administrations and oversaw the Carrs-Safeway merger in 1999.

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