The planned merger of grocers Kroger and Albertsons "has farmers and farmworkers worried about its negative impact on farms and rural communities," reports Shelby Vittek of Ambrook Research. The National Family Farm Coalition, the National Farmers Union, Farm Action and an assortment of regional grower associations "sent a letter to the Federal Trade Commission expressing their opposition to the merger, which they said would 'create a new mega-grocery buyer with exceptional buyer power to squeeze its suppliers, shrinking farmers' and workers' share of the food dollar.'"
The merger, which could "cause conflicts with overlapping markets — Western Growers, the California Fresh Fruit Association, and Colorado Fruit & Vegetable Growers Association — submitted an additional letter to the FTC," Vitteck writes. "In it, the groups pointed to the Albertsons' acquisition of Safeway in 2015 — after which the company awarded contracts only to its largest produce suppliers, leaving smaller farmers to sell elsewhere — as an example of the negative outcomes that can be expected with a merger of this size." Their letter sums up the possible purchase: "The buying power of the newly combined Kroger entity cannot be understated."
Small farmers are already struggling to compete for sales to larger chain groceries. Vittek reports, "Farmers routinely sell their crops for less than what it costs to produce them. The pressure of farming with such small margins has led 'members to farm less acreage, move production to other countries when feasible, or leave farming altogether,' the letter from the Western grower groups read. If the Kroger-Albertsons merger is allowed to continue, competition among buyers will shrink, leaving farmers with fewer customers (in this case, grocery retailers) to work with."
American farmers face large-chain "take it or leave it" bargaining tactics, which can erase their profits, alongside competition from foreign growers. "The trade organizations that oppose the merger emphasize the harm done to American farmers as grocery retailers continue to source more foreign producers, who are ready, willing and able to undercut American producers on operating costs and the price they will accept from the retailer. . . . That is harmful for farmers, farmworkers and rural communities that depend on a robust agriculture industry.'"
The merged grocer would have 710,000 employees in 48 states, a workforce some would say already suffers from corporate greed. "Profiteering stands out at Kroger and Albertsons, with profits far outpacing worker wage growth or the cost of food," wrote Daniel Fleming and Judy Wood in a CalMatters op-ed. "Their outsize price hikes are at least partially responsible for inflation. Even while they were competing with each other, these companies jacked up prices and had record profits."
The Federal Trade Commission "is in no rush to approve the merger" because grocery prices are a big part of inflation, "a hot topic political issue that Republicans have pressed against President Biden," Thomas Lee reports for The Street.
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