Attorneys for the state and supermarket chains Kroger and Albertsons on Thursday settled a lawsuit over the companies’ proposed $24.6 billion merger, disparaging each other’s expert witnesses and accusing the other of pushing an agenda that will harm shoppers and workers from Colorado.

Limited closing arguments a process that began on October 1 and is the third to try to block the merger of the food industry giants on the grounds that it would raise prices, reduce competition and harm local store customers, workers and suppliers. The Federal Trade Commission and the attorneys general of Colorado and Washington filed lawsuits, saying the merger would violate federal and state antitrust laws.

Denver District Judge Andrew J. Luxen will issue a ruling in the case, although there was no deadline for that decision Thursday.

Colorado Attorney General Phil Weiser filed a lawsuit in February to block the merger after holding 19 town halls across the state for public hearings. He said people overwhelmingly opposed the consolidation.

But Matt Wolf, the attorney representing Kroger, accused the state of trying to prevent his client from bringing lower prices to Colorado shoppers and higher wages for workers. Kroger has pledged to spend $1 billion a year to increase wages and benefits and $1 billion a year to lower prices for customers.

“Antitrust laws were written to encourage, not prevent, pro-consumer transactions like the one before the court,” Wolf said. “While Walmart, Costco and Amazon may be happy with the state’s efforts today, grocery shoppers will pay more and get less if the state gets its way.”

Kroger CEO Rodney McMullen and Albertsons CEO Vivek Sankaran testified earlier this month that combining their companies is the best way for them to compete with Walmart, the nation’s largest grocer by sales, and other growing chains. Otherwise, Sankaran said Albertsons may have to lay off employees and exit some markets to remain economically viable.

But state lawyers argued that the merger, which would be the largest supermarket consolidation in US history, warned of store closings, job losses and higher prices if the merger went through. Kroger, which operates King Soopers and City Market stores in Colorado, and Albertsons Cos., which owns Safeway, compete head-to-head and together account for at least 50 percent of all grocery sales in Colorado, according to the attorney general’s office. .

A plan to sell 579 of the companies’ stores to try to ease fears of losing market competition won’t work because the buyer, C&S Wholesale Grocers, doesn’t have the resources or experience to compete with Kroger after the merger. , said lawyer Arthur Biller. C&S is a grocery distributor with few retail stores and has sold many of the stores it has acquired in the past, seeing the sales as good for its distribution business, he added.

“This makes C&S not just a smaller competitor than Albertsons, but a worse competitor,” Biller said.

In Colorado, the proposed divestiture would divest 91 of the Albertsons-owned stores, a dairy plant and a distribution center to C&S. Two Albertsons stores are on the list to be sold, and the rest are under the Safeway banner.

As part of the $2.9 billion deal with New Hampshire’s C&S, Albertsons stores will retain the Safeway banner in Colorado. The distribution company will be able to continue to sell some of Albertsons’ private brands. And despite testimony from a state witness to the contrary, C&S will have the staff and resources to take over the stores, defense attorneys said.

Roger Davidson, an industry consultant and witness for the state, believes the stores bought by C&S will see declining revenues and some will likely close. He previously testified that C&S doesn’t have the “backbone” or staff to compete with Kroger.

During closing arguments, Wolf’s attorney challenged Davidson’s findings and accused him of lying about his academic credentials and having a conflict of interest because of his business connections. He also attacked an analysis by another state witness, Nitin Dua, whose testimony downplayed Costco, Amazon and other national chains as serious competitors to Kroger and Albertsons.

Biller criticized the defense expert witness’s modeling of competitors as unstable, producing “absurd results.”

Also in the suit is a $1 million civil penalty Weiser is seeking from each grocer for what he calls no-poaching and non-solicitation agreements during a 2022 strike against King Soopers. He said his office found emails while reviewing documents showing Albertsons agreed not to hire any King Soopers employees or solicit customers of its rival’s pharmacies during the strike.

The two companies said no such agreement exists.

United Food and Commercial Workers Local 7, which represents grocery workers in Colorado and Wyoming, is part of a coalition of unions fighting the merger, which was announced in 2022.

Albertsons and Kroger executives have said stores will not be closed and frontline workers will not lose their jobs if the merger is approved. But union members note the fallout from 2015 acquisition of Safeway by Albertsons. Haggen Food and Pharmacy, a small supermarket chain based in Washington state, bought some of the stores and filed for bankruptcy in less than a year. More than 100 stores and thousands of workers lost their jobs.

A decision is pending in a lawsuit in Oregon where the Federal Trade Commission has sued to block the merger until it can resolve the administrative complaint against Kroger and Albertsons. The attorneys general of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming have joined the suit.

The judge in the Washington state case is expected to issue a ruling during a Nov. 15 hearing.

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Originally published: October 24, 2024 at 6:05 p.m