Almost a year ago in March 2014, Cerberus Capital Management (owner of Jewel-Osco, Albertsons, Acme, Shaw’s, and Star markets) announced that it would acquire the entire Safeway chain of stores.
This week, the Federal Trade Commission announced that it would require both companies to shed 168 stores before merging so that the merged company would not be so large as to drown out its competitors.
Supermarket operators Albertsons and Safeway Inc. have agreed to sell 168 supermarkets to settle Federal Trade Commission charges that their proposed $9.2 billion merger would likely be anticompetitive in 130 local markets in Arizona, California, Montana, Nevada, Oregon, Texas, Washington, and Wyoming.
According to the FTC’s complaint, Albertsons and Safeway compete vigorously on the bases of price, quality, product variety, and services, and offer consumers the convenience of one-stop shopping for food and other grocery products. Without a remedy, according to the FTC, the acquisition will lessen supermarket competition to the detriment of consumers in 130 local markets.
“Consumers everywhere rely on local supermarkets for their weekly shopping needs,” said FTC Chairwoman Edith Ramirez. “Absent a remedy, this acquisition would likely lead to higher prices and lower quality for supermarket shoppers in 130 communities. This settlement will ensure that consumers in those communities continue to benefit from competition among their local supermarkets.”
