Letter to Hon. Lina Khan, Chair of the FTC - Cantwell & Murray Warn FTC Chair: Pending Grocery Chain Acquisition Puts Washingtonians at Risk

Letter

Dear Chair Khan:

We write to express our sincere concerns about the pending acquisition of Albertsons
Companies, Inc. (Albertsons) by the Kroger Company (Kroger) grocery chain. The merger poses
a specific and disproportionate threat to Washington consumers, workers, and our underserved
communities.

We are writing because we are concerned about the negative impact the merger could have on
both consumers and the large workforce employed by these two companies. Together, the 337
Albertsons and Kroger grocery stores in Washington represent 21.5 percent of the state's total.
Underserved communities throughout Washington benefit from these stores and what they
provide in price competition, convenience, high-quality nutritional access, and pharmacy
services. Given their aggregate share of the state's retail grocery sector, we fear that Washington
is at disproportionate risk of losing stores as a result of the proposed merger.

The 2015 merger of Albertsons and Safeway is instructive in this case. At that time, Safeway and
Albertsons were required to spin off approximately 150 stores to win FTC approval of their own
merger. The spinoffs were sold to Haggen, a Bellingham, Washington-based company, which
soon after filed for bankruptcy. In the end, Albertsons repurchased 29 of the Haggen stores,
reversing in part a condition of the merger intended to maintain competition. This history for
retail grocers, and particularly Albertsons, does not bode well for another Albertsons merger.
Based on this recent experience, there is a significant risk that with this transaction, too, many
stores will be closed, harming consumers and workers and potentially leaving food deserts across
our state.

Our most urgent concern is the announcement by Albertsons of a cash dividend of $6.85 per
share, payable on November 14, 2022, to its shareholders, only two years after the company
went public. This dividend of approximately $4 billion comprises nearly 20 percent of the value
of the company--an extraordinary cash outlay that directly benefits the largest shareholders of
Albertsons, who also control the board. This action appears to reflect a disregard for the
wellbeing of the ongoing business should the merger not be completed. The cash dividend could
adversely impact the ability of Albertsons to keep its stores open and its workers employed
should the merger with Kroger not be approved. Specifically, we are alarmed by reports that the
merger may involve selling hundreds of stores, potentially resulting in layoffs. We strongly
support the FTC's recent efforts to protect workers by scrutinizing mergers that may harm
competition in U.S. labor markets and urge the FTC to closely examine the impacts on workers
of this merger.

More than ever, access to convenient, competitive grocery retail is critical for lower costs and
better nutrition. Consumers are hurt as consolidation dominates the retail landscape and workers
lose their jobs as transactions reduce the number of competing outlets We therefore urge the
Federal Trade Commission to commit to a thorough investigation of this transaction and take
these facts into account when determining whether to approve it.

With regards,

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