The parent companies of Alaska’s two largest grocery chains, Kroger (Fred Meyer) and Albertsons (Carrs/Safeway), have proposed a merger that could lead to the closures of almost a third of Alaska’s grocery stores across the state, and our attorney general isn’t doing anything about it.
We are concerned for all Alaskan consumers and for Alaska’s food security. Veri di Suvero is the executive director of AKPIRG, Alaska’s only nonprofit consumer advocacy organization with a 50-year legacy of advocating for consumers and the public interest. Bruce Botelho served as Alaska’s attorney general for two administrations, and oversaw the Carrs-Safeway merger of 1999. Given our combined decadeslong experience fighting special, moneyed interests on behalf of Alaskans, we are alarmed about the proposed Kroger-Albertsons merger.
Proceedings have begun in the U.S. District Court to determine if the Federal Trade Commission’s attempt to block the Kroger-Albertsons merger will be granted. Attorneys general from nine states, including Wyoming, have joined the FTC lawsuit to block the megamerger between grocery giants Kroger and Albertsons. Two more have filed independent lawsuits to protect consumers and prevent grocery monopolies in their states.
Alaska is poised to be one of the states most impacted by the Kroger-Albertsons merger, yet Alaska Attorney General Treg Taylor hasn’t stepped up to join this lawsuit — instead, he’s just “watching.” With this inaction, he is failing Alaskans.
In their lawsuit, the FTC warns that this merger will reduce grocery competition nationwide, potentially resulting in increased prices, fewer choices, and job losses. Moreover, they strongly argue that the megacorporations’ proposed remedy — spinning off hundreds of stores — is unlikely to succeed.
Eighteen stores in Alaska (including all Carrs stores and every Safeway in Anchorage and Fairbanks) are set to be sold off to C&S, a New Hampshire-based wholesale grocer. Running a grocery operation in Alaska is difficult even for those with extensive history in the business. But not only does C&S completely lack experience and an existing supply chain in Alaska, they don’t have a strong portfolio or history in retail grocery anywhere. Nationwide, C&S currently runs 23 grocery stores, mainly in Wisconsin and New York, and “has spent the last decade trying to avoid being a supermarket operator” according to the FTC. Previously from 2001-12 they acquired 370 grocery stores, but by November 2012 they had shed all but three.
This record speaks for itself: Alaskans can’t rely on C&S.
Alaska has been through this song and dance before. AKPIRG’s lawsuit to stop the Carrs-Safeway merger in 1999 was ultimately settled with seven stores being spun-off to Northwest Retail Ventures, a company with a similar track record to C&S. All seven stores closed within a year.
This time around, when almost three times as many stores are at risk of being spun-off, it is imperative that AG Taylor not ignore the lessons learned from the Carrs-Safeway merger. AKPIRG advocated for the creation of a citizens advisory committee as part of the settlement in 1999. But a non-binding committee cannot solve supply chain woes. We need an entity with real legal power, like the Alaska attorney general, to step in.
Serving as attorney general for the first merger, Bruce Botelho recognizes that a failure of the 1999 merger lay in accepting a national company that had extensive supply chain experience, but little retail grocery experience and none in Alaska.
We shouldn’t make these mistakes again. These issues are being decided at a national level. How does sitting back and monitoring developments do anything to make sure that Alaska has a role in fashioning the outcome?
Alaskans can’t afford for these megacorporations to play monopoly with our food security. If this deal goes through, C&S will acquire 579 stores across the country. If their 18 new stores in Alaska fail, it will be a drop in the bucket to them — but that’s almost a third of our grocery stores across major hubs.
It is the attorney general’s duty to represent the people of Alaska and serve as a powerful advocate for consumer protection. By remaining silent about the Kroger-Albertsons merger, AG Taylor is being derelict in his duty. Instead of spending state resources joining culture-war lawsuits that don’t economically benefit Alaskans, AG Taylor should get off the sidelines and be at the table with the FTC to prevent a grocery monopoly in our state.
AG Taylor stated that Alaska could join Wyoming and others “later,” but this is not the time to sit idly by. The time to back the FTC lawsuit is now.
Veri di Suvero is the executive director for the Alaska Public Interest Research Group. Bruce Botelho was formerly the Alaska attorney general from 1994-2002.
