Colorado trial focused on Kroger-Albertsons mega merger enters third week
Denver 7 News
DENVER Closing statements in the Colorado trial over what could be the largest supermarket merger in U.S. history are expected in the coming days.
Testimony wrapped up Monday morning with economic expert Dr. Nitin Dua, who took the stand over the last several court hearings. He is one of the main experts the Colorado Attorney General's Office is using to make their case that if the merger between Kroger and Albertsons moves forward, it will have a negative impact on consumers because of the reduction in competition.
The companies have rebutted, saying the merger will allow them to create efficiencies in their business and will help lower prices in stores.
Dr. Dua had testified previously that he analyzed cities and market areas across the state, and found that even in large metro communities with several grocery stores, his conclusion was the same: There's currently strong competition between Kroger and Albertsons. If they were to merge, there would be no incentive to invest in stores, have sales or keep prices low to gain customers.
"Regardless of how you do product market or geographic market, there is a lot of increase in concentration due to the merger, that increase in concentration is in line with conclusions that there will be harm to consumers," said Dua.
As part of the merger, 91 stores would be sold to a third party company, C&S, but some of Dua's projections did not include the fact that those stores would not belong to Kroger or Albertsons a point criticized heavily by the company's attorneys Monday.
Denver7 has been following this story since the merger was first announced in October 2022. View a timeline of everything that's lead up to this trial, below.
Dua stated in court that even if the divested stores had up to 70% of the sales they did while they were owned by Albertsons, dozens of the areas studied would still be anti-competitive under the merger.
Kroger attorneys pushed back hard, pointing out that if the sales did above that, there would be a low risk of anti-competitive areas. They further claimed C&S are set up to succeed as strong competition and plan to invest in lowering prices.
In the deal, C&S would get leadership staff that will move over from Albertsons, they would be able to keep the "Safeway" banner, and they would have access to some of the private label products from the former companies, in addition to other resources.
"If [the CEO of C&S] testified that C&S will be ready, willing and able to compete on day one, you just disagree with them?" Matt Wolf, attorney for Kroger, asked Dua during cross examination.
"That's different from being an independent competitor. They may be willing to do so, that's totally fine, but if it's still reliant on the merging parties for certain assets, certain information, that still means it's not an independent competitor," responded Dua.
"Who sets prices after day one after the merger for C&S?" asked Wolf.
"People from C&S have testified that they will be setting prices," acknowledged Dua.
The trial continues Tuesday.