Grocery merger halted by judges

Greg Frazier said he and other members of United Food and Commercial Workers Local 1564 were "feeling good" after the Kroger and Albertsons merger fell apart, the latter grocery company deciding to pull out and sue the former after two judges on Tuesday in separate court cases halted the multi-billion-dollar deal.

"Right now, the workers are excited that they can just focus on the customers," said Frazier, president of the union, which represents thousands of New Mexico meat cutters and retail workers at Albertsons and Kroger.

Frazier's comments come as the two companies saw their merger — what would have been the biggest grocery store deal in U.S. history — blocked by judges in Oregon and Washington.

U.S. District Judge Adrienne Nelson issued a preliminary injunction blocking the merger Tuesday following a three-week hearing in Portland, Ore., The Associated Press reported. An hour later, Judge Marshall Ferguson in Seattle issued a permanent injunction prohibiting the merger in Washington after finding it would reduce competition in the state.

As a result, Albertsons on Wednesday filed a lawsuit against Kroger in the Delaware Court of Chancery, alleging Kroger didn't do enough to secure regulatory approval and is "seeking billions of dollars in damages from Kroger to make Albertsons and its shareholders whole," according to a news release from Albertsons, a Boise, Idaho-based grocery chain.

In New Mexico, the $25 billion merger would have led to the sale of nine Albertsons Market stores, including one in Clovis, to grocery distributor C&S Wholesale Grocers. It was part of a larger divestiture plan that would have seen Kroger and Albertsons sell off 579 stores across the country to the New Hampshire-based distributor, along with six distribution centers and a dairy plant.

Federal officials, however, argued in court that C&S, which manages the supermarket brands Piggly Wiggly and Grand Union, could not successfully operate the additional stores. A C&S spokesperson said the aborted merger ultimately terminated the divestiture agreement with C&S. It's unclear if Albertsons still plans to sell the nine New Mexico stores in the future.

"This does not change C&S' position as a market leader or our plans for future growth," C&S spokesperson Lauren La Bruno said. "We remain committed to our transformation strategy, which includes expansion into retail as well as evolving our capabilities and reach to better serve our wholesale customers."

New Mexico officials over the past year have argued the merger would have decreased the options for shoppers in the state, with New Mexico Attorney General Raúl Torrez calling the merger "anti-competitive" in a February announcement, saying he joined eight other attorneys general in the Federal Trade Commission lawsuit in Oregon.

A spokesperson for the New Mexico Department of Justice on Wednesday called the decision on Tuesday "a victory for customers" and said the blocking of the merger protects them from higher prices and reduced options.