FTC attempts to block Kroger's acquisition of Albertsons
UC economics professor tells WLWT it's uncertain whether the merger would lower costs for consumers
Kroger's attempt to purchase rival grocery chain Albertsons is in limbo, with the Federal Trade Commission attempting to block the proposed merger, WLWT reported.
David Brasington, PhD, James C. and Caroline Kautz Chair in Political Economy and professor of economics
The FTC has filed a federal lawsuit and launched an administrative proceeding against the deal, arguing it would “substantially lessen competition” and lead to higher grocery prices.
“The environment for businesses is that you really have to fight the FTC to have a merger,” said David Brasington, PhD, the James C. and Caroline Kautz Chair in Political Economy and economics professor in the University of Cincinnati's Carl H. Lindner College of Business.
While the government said the consolidation would lead to higher prices for consumers, Cincinnati-based Kroger said the company plans to reduce prices and increase wages and benefits for its employees after the deal is closed.
Whether the larger company would actually cut costs is uncertain, Brasington said.
“So, will the Kroger and Albertsons merger lead to economies of scale? And the promised cost cuttings — the price cuttings that Kroger has said? It's an empirical question,” he said. “We don't know yet.”
Featured image at top: Exterior of a Kroger store. Photo/Andrew Higley/UC Marketing + Brand
Impact Lives Here
The University of Cincinnati is leading public urban universities into a new era of innovation and impact. Our faculty, staff and students are saving lives, changing outcomes and bending the future in our city's direction. Next Lives Here.
Related Stories
WCPO: UC economist says wages can’t keep up with inflation
March 22, 2022
Multiple disruptions to the U.S. economy are posing problems for consumers, according to Michael Jones, PhD, associate professor of economics at the University of Cincinnati Carl H. Lindner College of Business.
The benefits and downsides for 'forever renters'
May 29, 2024
A growing number of people expect to rent their entire lives instead of buying a home, which presents potential benefits and downsides for these “forever renters,” University of Cincinnati professors told Business Insider.
Spectrum News 1: Inflation reaches 40-year high
April 13, 2022
A number of factors have caused inflation to reach a 40-year high, but it won’t be a permanent problem, University of Cincinnati economics professor Asawari Deshmukh told Spectrum News 1.