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The Biden administration is making a push for lower grocery prices with a focus on household essentials, aiming to ease the financial burden on consumers. President Joe Biden vocalized his concerns about price gouging, junk fees, and inflated prices, hinting at a future government crackdown on companies reaping abnormally high profits.
As outlined by Jared Bernstein, the chair of Biden’s Council of Economic Advisers, the administration aims to hold accountable companies that fail to pass on cost savings to consumers. The sweeping review of Census data has revealed a significant increase in revenue margins for food-and-beverage retailers compared to pre-pandemic levels, prompting the administration’s heightened focus on this issue.
The administration’s action coincides with the Federal Trade Commission’s assessment of Kroger’s (NYSE:KR) nearly $25 billion acquisition of Albertsons (NYSE:ACI). There are concerns among states, politicians, and stakeholders that this consolidation could result in raised prices for consumers, prompting heated debate and resistance from various quarters.
A Kroger spokesperson noted the alignment with President Biden’s stance while asserting that the merger would bring about lower prices for consumers through substantial additional price investments.
Despite these assertions, the proposed merger faces strong opposition from the FTC, state attorneys general, members of Congress, and the Teamsters union, which have expressed fears of reduced competition and potential job losses. The situation has intensified, with FTC Commissioner Rebecca Kelly Slaughter underlining a robust focus on scrutinizing mergers and thwarting those detrimental to consumers’ interests.
Recent legal actions and protests, including a lawsuit from the Washington State Attorney General to block the KR-ACI merger, are further complicating the deal. Nevertheless, Kroger and Albertsons are actively engaging with the FTC, including divestiture plans totaling billions of dollars, to allay antitrust concerns and secure regulatory approval.
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