Alaska attorney general claims grocery merger would lower prices. Don't believe it.

Contrary to the Anchorage Daily News headline and story, Alaska Attorney General Tregarrick Taylor is not “watching” the Kroger lawsuit, waiting to decide what to do.

He has long since decided to do nothing. His failure and that of Gov. Mike Dunleavy to raise any questions about the impact on Alaskans has been a clear pattern for two years.

Taylor has joined dozens of lawsuits that match his far-right view of the world and opined as the general on everything from the danger of reusable shopping bags to the benefits of AM car radios. His publicity staff has issued hundreds of press releases.

Taylor refused in February to join the lawsuit filed by the Federal Trade Commission, eight other states and the District of Columbia against the proposed $24.6 billion merger of Kroger and Albertsons.

Kroger, which owns the Fred Meyer chain, continues to claim that the $24.6 billion deal would lead to lower prices. And that the takeover is needed to compete with Amazon and Wal-mart.

Kroger said its plan would lead to the sale of 18 Safeway and Carrs stores in Alaska to C&S Wholesale Grocers, a company that has no operations in Alaska. C&S only has 25 supermarkets nationwide, most in the East.

C&S would buy 549 stores nationwide for a price that would do little more than cover the value of the real estate.

“Do we have to say that we won’t close stores?” Bob Palmer, now the former CEO of New Hampshire-based C&S Wholesale, asked about the stores the company would receive.

The short answer is that C&S won’t make promises about keeping stores open.

It’s unlikely that any of the 18 Alaska stores would stay in business long because they would be under a severe competitive disadvantage, forgotten in the shakeout that would be sure to follow.

In Fairbanks, the two Safeway stores and the Carrs store in North Pole would be sold. In Anchorage, nine Carrs stores would be sold. Here is the list of Alaska stores to be sold.

Kroger says it would not close any stores “as a result of the merger.” Don’t take that to mean that all stores will remain open in the months and years after the merger.

The most important part of the Anchorage Daily News story is the quote buried in the 19th paragraph that shows Taylor is clueless—he claims the merger will lower prices in Alaska.

This should have been at the top of the story, not the bottom.

“Potentially, there’s going to be more economies of scale for Alaskans and we will see prices drop, potentially, if there’s more economies of scale,” Taylor said. “One of the big hiccups for getting goods into Alaska is obviously shipping and if you can double the shipping, you can reduce your shipping rates. So ostensibly that would result in lower product prices for Alaskans.”

Ostensibly, there is no reason to believe this. The biggest supermarket merger in U.S. history will not lead to lower prices in Alaska or more competition.

The Federal Trade Commission said the nationwide plan to sell off stores deals with a "hodgepodge of unconnected stores, banners, brands, and other assets that Kroger’s antitrust lawyers have cobbled together and falls far short of mitigating the lost competition between Kroger and Albertsons.”

There is competition in Alaska today among Fred Meyer, Safeway, Costco and Walmart, as well as a number of smaller companies. Amazon is also a factor. There would be less competition with Safeway and Carrs out of the picture.

“The proposal completely ignores many affected regional and local markets where Kroger and Albertsons compete today. In areas where there are divestitures, the proposal fails to include all of the assets, resources, and capabilities that C&S would need to replicate the competitive intensity that exists today between Kroger and Albertsons,” the FTC press release said.

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