Editor’s Note: A version of this article originally appeared on the website of Food & Water Action (our affiliated organization) at an earlier date.

Just weeks after Vice President Kamala Harris promised to tackle price gouging, a Kroger executive admitted in court that the company had done just that. The Senior Director of Pricing at Kroger testified in a federal lawsuit that the company raised prices for some products higher than inflation.

The testimony was part of a hearing in the suit brought by the Federal Trade Commission (FTC), which seeks to block a $24.6 billion merger between Kroger and fellow grocery giant, Albertsons. If the deal goes through, it would be the largest supermarket merger in U.S. history and give the new corporation more than one-fifth of the entire U.S. grocery market.

News of the deal first emerged in October 2022 in the midst of soaring food prices. Since then, prices have stayed high, making food unaffordable for families across the country. As the lawsuit continues, we’re seeing just how corporate power and greed are contributing to this crisis. And if the Kroger-Albertsons deal goes through, things will only get worse.

Hearing Confirms: Kroger Price Gouged Through the Pandemic

Since the start of the COVID-19 pandemic, inflation rates and supply chain shocks have pushed the price of groceries higher and higher. For many of the country’s biggest food corporations, this was more blessing than curse. Megacorporations took advantage of the crises to raise prices higher than needed to cover rising costs. Then they pocketed the difference.

Kroger is no exception. On top of the company’s recent admission of price gouging in court, in 2021 another executive told shareholders, “We view a little bit of inflation as always good in our business.” And Kroger’s business that year was very good. From fiscal year 2021 to 2022, the company’s profits rose from $3.5 billion to $4.1 billion. 

Why have food giants been able to get away with such egregious behavior? Their dominance in the industry. Kroger and Albertsons are the second- and fourth-largest grocery retailers in the country, respectively. Along with Walmart and Costco, these corporations take in over two-thirds of all grocery sales.

Kroger and Albertsons’ market power is key to their profits, and with this deal, they stand to grow even more powerful. But currently, there’s one pesky thing standing in their way: a lawsuit by the FTC. Eight states and the District of Columbia have also joined the suit.

If the court rules in favor of the FTC, it could spell doom for the deal. So it’s no surprise that Kroger and Albertsons are turning to dirty tactics to push it through.

Kroger and Albertsons Are Playing Dirty to Gain More Power

Recent reporting by The Lever shows just how far Kroger and Albertsons are willing to go. In August, the FTC found that Albertsons executives had deleted texts related to the merger, even after the court ordered the company to preserve evidence. Four of the eight Albertsons execs set to testify have been deleting business-related texts. 

Additionally, Kroger is seeking to strike down 100 years of legal precedent in efforts to get this deal through. In August, the company filed a lawsuit attacking the constitutionality of how the FTC operates.

The agency’s administrative court has long brought down the final decision on mergers, and it’s currently reviewing the Kroger-Albertsons deal. Kroger is attempting to eliminate this long-standing process, forcing the merger to be heard in a federal court, which it views as more favorable.

Kroger and Albertsons are also spending big on lobbying Congress, regulators, and the White House while this suit plays out, The Lever reported. For instance, since January 2022, Albertsons has spent $7.6 million lobbying on the merger and related topics including antitrust, competition, and supply chain issues. 

Trial Reveals the Truth Behind Albertsons and Kroger’s Claims

Kroger and Albertsons argue that the merger is necessary for the company to lower prices for consumers. If it goes through, Kroger claims it would invest $1 billion into price reductions and $1 billion in raising employee wages and benefits. But don’t let this fool you. 

In a recent testimony, the CEO of Kroger said that the company’s promise of “lower prices” means lower than they would have been in a hypothetical world without the merger; prices could actually rise higher than current ones. Another Kroger executive admitted that it may not spend the funds set aside for price reductions if the company needed to pay out shareholders.

At the same time, the CEO of Albertsons has painted the company as struggling and in need of a rescue. In a recent testimony, he said he would have to consider layoffs and store closures if the deal doesn’t go through. But in fact, Albertsons’ profits have increased from $466 million pre-pandemic to $1.3 billion in fiscal year 2023.

Kroger has agreed to sell off hundreds of its stores to a competitor as part of the deal, ostensibly to give up some power. But this strategy has already failed in a previous Albertsons deal. In 2015, the company sold stores to Haggen so it would be allowed to acquire Safeway. In less than a year, Haggen was selling off stores — including dozens of stores back to Albertsons! — and filed for bankruptcy. 

In this case, Kroger is planning to sell stores to C&S Wholesale Grocers. But in texts revealed during the trial, C&S executives themselves mocked the stores they’d receive and doubted they would do well.

To Lower Food Prices, Fight Corporate Power!

Though revelations like this are damning, we already know that any mega-merger is a bad idea. As corporations gobble up competitors and gain power, execs and shareholders rack up more profits while everyone else loses out. 

Without competition, big corporations can squeeze workers’ wages, pay lower prices to farmers and suppliers, and can raise prices that consumers pay for the products on the shelves. In fact, despite promises like Kroger’s, mergers usually lead to a rise in food prices.

Though we have laws on the books to prevent this, decades of lax enforcement have allowed corporations to amass even more power. However, the Biden-Harris administration is finally turning a new leaf. It has worked to boost competition and better enforce antitrust laws. In 2023, the FTC introduced new merger guidelines, which paved the way for its current lawsuit against Kroger and Albertsons. 

This is the kind of action we need more of to start breaking corporations’ stranglehold on our food system. For too long, they have been able to get away with dirty tactics, ripping off families and padding their own pockets. Better antitrust enforcement and an end to massive corporate mergers is essential to providing affordable, sustainable, healthy food for all.

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