This week, more than a third of the Alaska Legislature joined Alaska’s Congressional Delegation in opposing the Kroger-Albertsons grocery store merger, arguing that it would make life in Alaska much more difficult.
In a letter to the Federal Trade Commission, the legislators worry the merger would pave the way for monopolies in Alaska’s grocery store market and raise already-high costs for food in the state. It also raises concerns about the potential for hundreds of lost jobs if 14 stores operated under the Carrs and Safeway brands close as expected.
“Alaska already has some of the highest grocery prices in the nation, especially in our more secluded and rural areas, connected only by air or water. We cannot, in good conscience, support unnecessary cost increases that place barriers on Alaskans’ ability to put food on the table,” explained the letter signed by 24 state legislators, including Democrats, Republicans and Independents. “Local store closures by this merger will inevitably lead Kroger to lay off hundreds of Albertsons employees, most of whom are part of a well-established labor union that advocates for livable wages and benefits – whereas Kroger does not offer similar packages.”
The letter also casts doubt and skepticism about Kroger company claims that they plan on investing in wages and benefits—noting that it’s been light on the details—or that the 14 yet-to-be-identified stores affected by the merger will stay open under new ownership by C&S, which is the parent company to Southeast/Midwest grocery store chain Piggly Wiggly.
A letter signed by Alaska U.S. Sens. Lisa Murkowski and Dan Sullivan, also voicing concern about the merger, noted that C&S has no experience with the unique challenges of working in Alaska and that nothing in the agreement would require them to remain open.
“This merger, if approved, appears to go against the interests of Alaska and Alaskans,” the two said in their letter to the FTC.
U.S. Rep. Mary Peltola was even sharper in voicing her concerns to the FTC, asking the commission to block the merger because it “could result in a significantly reduced competition or even a near-monopolistic landscape in a state that already has some of the highest costs of living in the United States.”
The state legislators’ letter said it’s causing a fair bit of concern and insecurity for Alaskans.
“This leaves many communities worried, and rightly so, that a reliable and affordable food source may not be as readily available anymore. It could mean families in an already weakened economy may have to find income in another community or state,” the letter notes, adding an essential bit of history about grocery store mergers in the 49th state, “Alaskans are leery, having already experienced prior grocery store mergers. In the late 1990s, Safeway purchased all locally owned Carrs grocery stores in the state, and despite the promise of continued employment and increased competition, they soon left the state. Alaska Marketplace purchased those closed stores and began business as a competitor to Safeway, but within a short period of time, the company closed, leaving many communities without competition.”
The list of signees includes 11 state senators—including Republican Sens. Cathy Giessel, Robert Myers, Jesse Bjorkman and Click Bishop—as well as 13 state representatives from the bipartisan minority caucus.
In a prepared statement accompanying the announcement of the letter, Sen. Giessel highlighted the differences between Alaska and the Lower 48 and warned the impacts could be particularly harsh on rural Alaska.
“Alaska is unique, and decisions made at the highest level can always be felt directly and harshly by Alaskans if our concerns are not taken into consideration. Alaska already has some of the highest food prices in the nation, especially when you consider many urban and rural areas are only accessed by air or water,” she said. “This potential merger has the very real possibility to exacerbate this circumstance.”
Why it matters
The details of the proposed merger have been largely vague and the promises noncommittal, leaving many worried that not only will operations vastly change but that Alaskans will be left with fewer choices and, thus, less competition.
And groceries already aren’t exactly cheap in Alaska.
According to the latest cost of living index released by the Council for Community and Economic Research, which surveys 274 urban areas in the country, Fairbanks and Alaska rank the highest compared to the other communities, with their cost of groceries at more than 25% higher than the national average—higher than San Francisco and Seattle.
The letter
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Twitter.
