A group opposing the proposed merger between Safeway and Albertsons say it would reduce competition and increase food prices. Food & Water Watch filed its comments with the Federal Trade Commission (FTC), citing 44 markets in which the two chains compete currently and claiming that prices could rise by as much as US$2bn per year if the merger goes ahead.
“The FTC must prevent this supermarket merger from allowing a more dominant Albertsons-Safeway to raise food prices for consumers who have fewer options of where to shop,” Food & Water Watch’s executive director Wenonah Hauter said in a statement. “Increased supermarket consolidation and mergers increase the cost of food for consumers and this deal comes with an estimated US$1bn to US$2bn annual price tag at the checkout aisle.”
The group said the merger would also hurt fruit and vegetable producers who supply Safeway’s “locally grown’ programme.
Safeway said on Thursday that the FTC had made a second request for information about the proposed deal, but did not specify what the request consisted of. The notice extends the deal’s closing date by at least 30 days after Safeway and Albertsons have complied with the request.
Cerberus Capital Management LP, which owns Albertsons, agreed last month to buy Safeway in a deal valued at more than US$9bn, creating a retailer with over 2,400 stores. Analysts have already predicted that some stores will almost certainly have to close in California, where both chains have a total of 678 stores – roughly three times more than in their next biggest market.
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