The proposed merger between Albertsons and Safeway could cost consumers up to $2 billion
, according to extensive comments filed with the Federal Trade Commission by a group named Food & Water Watch. The consumer group estimates that “increased retail grocery concentration in the 44 markets where the two chains currently compete could increase consumer grocery prices between $900 million and $2 billion every year.” It’s already been rumored that the FTC will have to close some Safeway or Albertsons stores in markets where they overlap, but will these concerns be enough to block the merger entirely?
We’ve already seen the FTC approve mergers between a handful of retailers recently, like Kroger and Harris Teeter or Nash Finch and Spartan, but the Food & Water Watch group is concerned that the size of the Safeway deal will have a tremendous negative impact for consumers and farmers. Food & Water Watch Executive Director Wenonah Hauter claims that the merger would raise food prices for consumers who have fewer options where to shop, while harming local and regional farmers who sell into Safeway’s “locally grown” program, according to a press release.
“How big is big enough for the federal antitrust regulators to finally step up and protect consumers and farmers from a rapidly consolidating food and agricultural marketplace,” asked Hauter.
The comments go on to explain that if the deal goes through, it would eliminate a “key competitive rivalry that has helped make grocery prices competitive.”
While the merger has had some industry experts wonder what will happen with their contracts, only time will tell how the FTC will react to these comments.
Stay tuned to DeliMarket TV as we continue our coverage on Albertsons’ merger with Safeway.