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Produce and Fruit Associations Oppose Kroger-Albertson’s Merger

 01/16/2023

The Western Growers, California Fresh Fruit Association and Colorado Food and Vegetable Growers Association are actively opposing the proposed merger of Albertson’s and Kroger. The transaction would collectively represent 16 percent of the U. S. grocery market, second to Walmart at 21 percent.

 

According to the produce associations, Kroger has previously demonstrated predatory buying practices, including:

 

  • Demanding 90-day credit, requiring waivers from the Perishable Agricultural Commodities Act that requires 30-day payment.  This demand issued in 2018 was subsequently rescinded following intervention by the USDA.
  • Kroger bills shippers for private label packaging.
  • Suppliers cannot dispute rejections based on quality or discrepancies in quantity.
  • Kroger and other large chains import fruit and produce from other nations with lower cost structures to the detriment of domestic producers who are required to conform to minimum wage rates and other legal restrictions.

 

Based on the unsatisfactory trade conditions imposed by Kroger, many producers and growers have opted to supply Albertson’s, an option that would disappear in a merger.

 

In a letter addressed to the Anti-Trust Division, of the Department of Justice and the Federal Trade Commission, Dave Puglia, President and CEO of Western Growers, stated, “The Kroger-Albertson’s merger is anticompetitive and will harm the fresh produce industry, farm workers and farm communities, consumers and threaten national security.”  He added, “Eliminating major competitors from the marketplace never leads to reduced prices for the consumer.  Rather, food costs - already under pressure by high inflation - will only go up if this mega-merger is permitted to proceed.”

 

The concerns of produce and fruit growers are in large measure reflected in the situation with eggs. The establishment of ProEgg Cooperative organized in accordance with the Capper-Volstead Act will operate in 13 western states and serve as a single marketing entity. ProEgg will include as shareholders Cal-Maine Foods, Central Valley Eggs, LLC, Colorado Egg, LLC, Hickman’s Egg Ranch, Inc., Oakdell Egg Farms, Inc., Opal Foods, LLC, Ritewood, Inc. and Willamette Egg Farms, LLC.