U.S. retailer Kroger filed a motion for preliminary injunction against the U.S. Federal Trade Commission's (FTC) challenge of its merger with Albertsons, one week after confirming it would lower grocery prices by USD 1 billion (EUR 900 million) if the merger is approved.
Simultaneously, UFCW Local 555, a union representing grocery employees, pulled its support for the Kroger-Albertsons merger and voted to strike against Fred Meyer, a Kroger subsidiary.
“While our local [union chapter] was the only local to publicly support the merger of Kroger and Albertsons, we have changed our position as a result of new information as part of the bargaining process,” UFCW Local 555 said. “Kroger’s continued failure to not live up to [its] commitments in current contracts while being given every opportunity is disappointing. We’ve had no other option but to file a federal lawsuit on the matter and withdraw our support for the merger.”
Meanwhile, Kroger said it filed the injunction in the U.S. District Court for the Southern District of Ohio partly because the FTC is violating its constitutional protections by challenging the merger in two separate tribunals, "in an inappropriate attempt to receive multiple opportunities to litigate the same issues.”
“Despite forcing Kroger to participate in this unconstitutional administrative proceeding, the FTC has also filed a motion in the federal court proceedings seeking to block the merger for the duration of its administrative proceeding – which will likely take several years to resolve,” Kroger noted.
Hearings for the federal court proceeding will commence 26 August in the U.S. District Court for the District of Oregon.
Kroger also said that the FTC is violating Article II of the U.S. Constitution because the administrative law judge presiding over the proceeding is not removable by the president. Additionally, the FTC is “seeking to adjudicate Kroger's private rights to contract with another private party administratively through the executive branch rather than in the independent judicial branch,” the retailer said.
"The merger between Kroger and Albertson's is squarely focused on ensuring we bring customers lower prices starting day one while securing the future of good-paying union jobs," Kroger Chairman and CEO Rodney McMullen said. "We stand prepared to defend this merger in the upcoming trial in federal court – the appropriate venue for this matter to be heard – and we are asking the court to halt what amounts to an unlawful proceeding before the FTC's own in-house tribunal."
On 15 August, Kroger said it plans to lower grocery prices by USD 1 billion – double the amount it had originally announced publicly – if the merger is allowed to proceed.
Kroger had previously promised to ...
