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Feb. 26—To New Mexico Attorney General Raúl Torrez, it was an obligation to join the Federal Trade Commission and a slew of other states in a move to block what would be the largest grocery merger in U.S. history.
The group on Monday announced a federal lawsuit and administrative complaint, seeking a temporary injunction to prevent a nearly $25 billion proposed merger deal between Kroger and Albertsons. The companies have dozens of stores across New Mexico, including Smith's, which is a subsidiary of Kroger.
Torrez said the lawsuit is an effort to protect New Mexicans from higher grocery prices and lower employee wages.
The lawsuit, which was filed in U.S. District Court in Oregon, alleges the merger would violate the Clayton Act, which prohibits acquisitions that would create a monopoly or substantially lessen competition, according to the New Mexico Department of Justice.
"We had an obligation to try to step in and stop this merger," Torrez said.
He said prices would likely rise as a result of the merger reducing competition. He said he's also concerned about the effect the merger would have on frontline grocery store workers whose jobs would be put at risk.
It's not just New Mexico holding these worries. Seven other states and the District of Columbia are also parties in the lawsuit, and Torrez said the issue expands beyond state and party lines.
"We felt it was important to join that effort and work collectively to try to represent the interest of consumers and folks who are already struggling with incredibly high food prices," Torrez said.
This merger proposal comes after years of inflated food prices. Torrez said food prices are one of the fastest rising aspects of consumer goods people buy, and groceries are essential.
"This merger, at this moment, would make that impact even more difficult for working families to navigate," he said.
Kroger and Albertsons argue the merger would make the stores more competitive against other big box stores like Walmart or Amazon and lower prices.
Torrez said there's been too much consolidation in the grocery sector in the last 30 or 40 years.
"Further consolidation in this market isn't is not going to do anything to improve either the choices that consumers have or the prices that they have to pay for getting the basic things they need to feed their family," he said.
As part of the merger, Kroger and Albertsons have proposed to divert hundreds of stores and other assets to C&S Wholesale Grocers, but the FTC says that falls short. Indeed, Torrez said this divestiture package wouldn't ensure stores could be competitive in a consolidated operation and deliver food at a reasonable price.