By Siddharth Cavale
NEW YORK (Reuters) -Kroger Co’s acquisition of Albertsons Companies Inc could further exacerbate income inequality through job losses and eroding wages at a time of high inflation, a group of the retailers’ biggest unions and antitrust experts wrote in a letter seen by Reuters on Thursday.
“In many markets across the country, grocery competition would cease, likely resulting in employee layoffs and higher prices,” they wrote in a letter addressed to the Federal Trade Commission (FTC) chairwoman Lina Khan, urging the agency to block the deal.
“The merger should be blocked, as it would harm workers, consumers and communities,” said the United Food & Commercial Workers (UFCW) Local 400, who authored the letter.
Twenty-six organizations undersigned the message, including the American Economic Liberties Project, Center for Economic and Policy Research, along with seven UFCW local chapters representing more than 100,000 Kroger and Albertsons’ workers.
The letter, first seen by Reuters, also urged the FTC to immediately investigate Albertsons’ “unusual” $4 billion dividend to shareholders on Nov. 7, which it said would leave the company “largely depleted of liquid assets” and “unsustainable as an ongoing concern.”
Attorneys general of three states and the District of Columbia have made similar claims this week, filing lawsuits in federal and state courts, seeking to block the dividend payment – announced as part of Kroger’s $25 billion acquisition of rival Albertsons last month.
The deal , which would create a 5,000-store supermarket behemoth, was hammered out to better compete with market leader Walmart Inc but was expected to run into antitrust roadblocks.
“The allegation that this dividend will somehow hinder our ability to compete in the marketplace is meritless,” an Albertsons spokesperson said in an emailed response to the letter.
“The payment of the special dividend will not hinder Albertsons ability to continue investing in our stores and technology…and will not impact the agreements that we have made with unions representing our associates to increase wages and benefits,” the spokesperson added.
As part of the deal , Kroger said it has committed to making investments of about $500 million to lower prices, $1.3 billion into Albertsons’ stores to improve the customer experience and $1 billion to continue raising associate wages and comprehensive benefits, in response to worries about inflation.
Kroger was not immediately available to comment.
(Reporting by Siddharth Cavale in New York; Editing by Aurora Ellis)
