UFCW Reformers Block Kroger-Albertsons Mega-Merger

In a victory for labor—and in particular, for a coalition of reform-minded United Food and Commercial Workers local unions—judges in Oregon and Washington state have separately ruled against the proposed mega-merger of Kroger and Albertsons, effectively blocking it and leading Albertsons to terminate the merger agreement.

On December 10, a federal district court in Oregon upheld a preliminary injunction on the merger requested by the Federal Trade Commission (FTC). On the same day, a court in Washington also ruled against the merger in a separate suit brought by the state’s attorney general. Both cases, as well as a third case in Colorado, were backed by the UFCW locals.

Albertsons withdrew from the deal the next day, and immediately sued Kroger for not having done enough to get the merger approved. Markets had appeared to anticipate the defeat: Albertsons’ share price sagged in recent months.

WOULD HAVE CLOSED STORES

The proposed $24.6 billion merger of Kroger, one of the largest supermarket retailers in the U.S. (it is second in sales only to Walmart), and Albertsons, the fourth-largest, would have eliminated grocery competition and raised food prices in large swathes of the country.

Together, the two chains have a combined national market share of 36 percent nationally, and more than 50 percent in Washington state.

Some grocery stores would likely have disappeared altogether. In the wake of the 2015 deal between Albertsons and Safeway, dozens of spun-off stores acquired by a third-party ended up closing. This time the chains were proposing to spin off stores to C&S, which is mainly a wholesaler and ill-equipped to suddenly run many grocery stores—one of the reasons courts rejected the deal.

For workers, it would also have meant sitting across the bargaining table from an even more powerful and consolidated employer while fighting against the layoffs and deteriorating pay and working conditions that a merger would bring.

Kroger and Albertsons together employ at least 700,000 workers under 25 different “banners,” such as Safeway, Ralphs, Harris Teeters, Shaws, Fred Meyer, and Food 4 Less. More than 300,000 of them are represented by the UFCW.

The FTC’s complaint, which may strengthen the legal precedent for taking into account the labor market impacts of mergers rather than just the impact on consumers, pointed specifically to the reduced leverage for workers in not having an alternative employer—or another store for customers to go to in the event of a strike.

The complaint cites the experience of UFCW Local 7, one of the locals in the coalition, in its 2022 strike against Kroger’s King Soopers stores in Colorado. The Kroger-Albertsons case has been called “the first high-profile example of [the FTC] trying to go after a merger using a labor market theory.”

SPRANG INTO ACTION

When the merger was first proposed in fall 2022, this group of UFCW locals immediately recognized the stakes. The core members include UFCW Local 3000 (Washington and Idaho), Local 7 (Colorado and Wyoming), and Local 770 and Local 324 (both southern California).

Together, these locals sprang into action to oppose it—in defiance of the UFCW international union’s silence—launching the Stop the Merger campaign, which would play a key role in the victory.

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Not coincidentally, these locals were fresh off a round of coordinated bargaining with Kroger, which had begun in January 2022 with the same strike in Colorado described in the FTC complaint.

This coordination was another effort that defied business as usual in the UFCW; the union does not have a master contract for Kroger, and its locals typically bargain hundreds of separate agreements with no coordination. Coordinated bargaining is also a plank of Essential Workers for Democracy, whose activists are organizing to revitalize the UFCW.

A LOCAL EFFORT

The Stop the Merger campaign thus became an extension of the reformers’ determination to match up organized worker power against ever-consolidating corporate power. The coalition eventually grew to include unions representing 100,000 Kroger and Albertsons employees across 14 states and the District of Columbia. Hundreds of allies outside of labor also joined.

The core UFCW locals pooled resources for lawyers,economists, and capital strategy researchers to help argue the legal case (working closely with the FTC to craft the complaint and sharpen the labor market analysis), as well as for organizing and communications for a public campaign. The campaign held frequent, well-attended press conferences and town halls for members throughout 2023 and 2024, helping to drive the news cycle and a groundswell of opposition to the merger.

Inside the UFCW, reformers succeeded in pressuring the international union into publicly opposing the merger, leading to a statement issued by delegates at its International Convention in May 2023. However, the UFCW has not since made any substantive efforts to oppose the merger, nor made any contribution to the Stop the Merger campaign, which has been funded entirely by local unions.

Todd Crosby, who helped coordinate the Stop the Merger campaign, called it “the closest thing the UFCW has” to the big public contract fights we’ve seen in the Teamsters and the Auto Workers. “This was a national crisis,” said Crosby, a former president of UFCW Local 21 (now Local 3000), “and these locals have stepped up and won where there was a vacuum of leadership.”

STILL AN UPHILL FIGHT

Under the Biden administration, the FTC and the Department of Justice have pursued antitrust cases more aggressively, and with a stronger eye toward the effects of mergers on labor. However, antitrust enforcement is expected to backslide under the incoming Trump administration.

Trump’s pick for the head of the DOJ’s antitrust division, Gail Slater, is regarded as sympathetic to expanded enforcement—but his pick to replace Lina Khan as chair of the FTC, Andrew Ferguson, is a traditional conservative who is likely to embrace the “merger boom” that Wall Street is anticipating. Khan played a pivotal role in the success of the complaint against the Kroger-Albertsons deal and has been the key architect of the FTC’s aggressive recent approach.

Within grocery at least, the failure of the Kroger-Albertsons merger should act as a deterrent to further attempts at building monopoly power. However, the trend in grocery consolidation dates back many decades, and UFCW locals have long struggled to match forces with employers across the bargaining table.

In early 2025 the same coalition of Western UFCW locals will be up against Kroger once again—and thanks to their efforts, they won’t be facing a Kroger-Albertsons behemoth. Now the coalition is calling for Kroger CEO Rodney McMullen to resign. The company announced $7.5 billion in stock buybacks immediately after the failure of the merger; the unions say those funds should have been used to improve wages and working conditions or invest in new stores and repairs.

“It was under his leadership that both companies wasted the last two years and nearly $1 billion pursuing a doomed merger,” said Local 3000 President Faye Guenther in a statement. “It’s past time for him to go.”