Alaska attorney general says state ‘watching’ mega grocery merger case, could later join

In a brief interview Wednesday, Alaska’s attorney general said the state is “watching” the Federal Trade Commission’s effort to block the merger between Kroger and Albertsons, and indicated the state could still join the case if it chose to.

Oral arguments in the federal government’s case against the merger opened this week.

The $24.6 billion deal would change the grocery landscape across the U.S. In Alaska, it would combine the two major supermarket chains, Fred Meyer and Carrs Safeway. Albertsons and Kroger have announced that in Alaska, 18 Carrs Safeway stores would be divested to C&S Wholesale Grocers, a wholesale grocery supplier based in New Hampshire.

Attorney General Treg Taylor, when asked why Alaska hasn’t joined other states in the lawsuit aiming to block the merger, said the state is tracking the case. The state can bring its own action if it finds “that there is going to be an actual harm to Alaskans,” he said.

“Obviously there are, like I said, some concerns with the merger,” he said during a break at the Alaska Oil and Gas Association’s annual conference in Anchorage.

“But there’s also some benefits. And so that’s what we’re looking at,” he said. “We’re watching it and we’ll see what happens with this case. Just because we haven’t joined this case, doesn’t mean we can’t later file.”

The attorneys general of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming have joined the case alongside the federal government. Washington and Colorado are also suing in state courts to block the merger.

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Alaska’s congressional delegation supports the federal government’s action, including Rep. Mary Peltola, who joined an amicus brief backing the government’s arguments. They say many Alaskans are concerned that a combined chain would lead to higher prices, store closures and job losses in a remote state where groceries are already expensive.

Several Alaska lawmakers also support the FTC in the case.

Alaska’s Department of Law often joins states in other legal actions, including teaming with other Republican-led states to support former president Donald Trump in cases involving the former president.

The collaboration often occurs as amicus briefs, the “friends of the court” filings made by groups that aren’t party to a case but have relevant expertise.

At the oil and gas conference, Taylor joined Republican attorneys general on stage to discuss multi-state legal actions in a panel called “Defending State’s Rights Against Federal Overreach.”

The group, including state chief attorneys from Louisiana, Kansas and South Dakota, discussed teaming up with other Republican-led states against federal efforts to limit resource development.

Taylor said Alaska sometimes joins with Democratic-led states in cases involving consumer protection.

“It has nothing to do with being a Republican or a Democrat,” Taylor said of the state’s position on the merger case. “It has to do with the specific situation that Alaska is in.”

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Most of the state attorneys general that have joined the federal government’s case against the grocery merger are Democrats. Wyoming’s attorney general is Republican.

Albertsons says it owns 25 stores in Alaska, according to documents in the federal case. State officials say 11 Fred Meyer stores operate in Alaska. C&S Wholesale, the company that would receive 18 Alaska Carrs Safeway stores in a divestment, operates Grand Union grocery stores on the East Coast and Piggly Wiggly grocery stores in the Midwest, South and Northeast. It also operates warehouse and office locations in several U.S. states, including in Hawaii, allowing the company to serve retailers nationwide, the company says.

Taylor said a benefit of a combined supermarket giant in Alaska could be improved shipping rates that help lower grocery prices.

“Potentially, there’s going to be more economies of scale for Alaskans and we will see prices drop, potentially, if there’s more economies of scale,” he said. “One of the big hiccups for getting goods into Alaska is obviously shipping and if you can double the shipping, you can reduce your shipping rates. So ostensibly that would result in lower product prices for Alaskans.”

Taylor said one example of the Department of Law stepping in to protect consumers in the past involved proposed mergers by sporting outlets.

When Bass Pro acquired Cabela’s in 2017, the state “monitored that, even post-merger,” he said.

Based on evidence from that effort, the state opposed a subsequent merger between Bass Pro and Sportsman’s Warehouse, he said. The companies dropped that $785 million deal in 2021, following an investigation by the Federal Trade Commission.

[Previous coverage: What the proposed Albertsons-Kroger merger could mean in Alaska]

Kroger and Albertsons argue that they will invest to improve the customer experience, reduce prices and increase wages and worker benefits. They say that combining their operations will help them survive against competitors like Walmart, Costco and Amazon, which owns Whole Foods.

Critics of the merger have said Alaska faces unique concerns such as limited competition. Fred Meyer and Carrs Safeway stores often face off in the same neighborhoods. Nearly all store products in Alaska arrive at a single entry point, at the Don Young Port of Alaska in Anchorage. Bad weather in winter occasionally delays ships, thinning food on shelves.

The critics have pointed to past grocery chain mergers that resulted in closures of divested stores, including Safeway’s takeover of the Alaska-based Carrs chain for $330 million in 1999.

At the time, the state of Alaska required that seven stores be sold to a competitor as part of the deal. Alaska Marketplace acquired six of those stores, but they closed in little more than a year. Opponents asserted that the state erred by allowing Safeway to sell off lower-performing stores.