DENVER (KDVR) — Attorney General Phil Weiser is concerned with the possible merger of two grocery store chain corporations and he discussed why it is significant for Colorado.
The combination of the companies could result in “higher food prices for Colorado consumers, lower wages for workers, fewer jobs, and negatively impact farmers and other local suppliers,” Weiser’s office said in a statement.
The possible union is being reviewed by the Colorado Department of Law to make sure it will not negatively impact farmers and the agricultural realm.
Colorado is not the only state worried about the negative effects of the two becoming one. California has also chirped in on the possible downfall the merger could create in its state.
Washington State has taken legal action to block a $4 billion payout to Albertsons investors as part of the deal, and on Thursday, Weiser announced Colorado filed a motion in support of that move.
Weiser is particularly concerned that those funds could be better spent on the spin-off company that is part of the deal. The company plans on spinning off anywhere between 100 and 375 stores into a separate company, as part of the deal. Some of those stores could be located in Colorado.
Weiser pointed to precedent in 2015, when Albertsons divested 146 stores to what was known as Haggen Inc. at the time. Haggen went bankrupt several months after the divestment.
Weiser argued in the brief that the cash payout to investors could “poison the well for any potential divestiture remedy,” which could include capital improvements, routine maintenance and ensuring proper inventory.
You can watch Weiser’s full news conference in the player above.
Deal to form alliance between Kroger and Albertson’s
Kroger announced its plan to acquire Albertsons for $20 billion in mid-October. Together, the companies would control about 13% of the U.S. grocery market. If it’s approved by U.S. antitrust regulators, the deal is expected to close in early 2024.
Opposition to merger
Local United Food and Commercial Workers unions from across the country stood in solidarity at a press conference to stop the two grocers from becoming one in Washington last week. Kim Cordova, president of UFCW Local 7, traveled from Colorado to the nation’s capital to participate in the event.
U.S. Sens. Amy Klobuchar and Bernie Sanders met with Cordova and union members to discuss the outcome scenarios. Senators also held a hearing to ask both grocers’ CEOs vital questions.
The companies say the merger will allow them to keep up with rivals like Walmart, Costco and Amazon. They also say it will save shoppers more money and allow them to invest more in employees.