Kroger-Albertsons merger and its impact on Oregon

Kroger, the parent company of Fred Meyer and QFC, is set to acquire Albertsons for $24.6 billion ¹. The merger would result in a “moderate concentration” of Oregon’s retail prescription drug market, with Kroger commanding nearly 30% and its nearest competitor holding 13% ². However, the merger could have a significant impact on Oregon’s population, particularly in rural areas, as Kroger would control nearly 30% of the state’s retail prescription drug market ².

The Oregon Health Authority has released an analysis that found that Kroger and Albertsons operate more than 150 retail pharmacies spread across 29 counties in Oregon that make up nearly 99% of the state’s population 2. If Kroger successfully purchases Albertsons, it could control nearly 30% of Oregon’s retail prescription drug market, which could have a significant impact on the state’s population ².

The merger would be the latest in an increasingly consolidated health care services market in Oregon and nationally. It would also come as the number of retail pharmacies have dwindled in recent years, sparking particular concern about access in rural Oregon ².

However, there are concerns about the lack of clarity about which stores will be closed as part of the merger. Albertsons sold 146 Haggen supermarket stores after acquiring Safety in 2014. Haggen later filed for bankruptcy and blamed the merger for its demise ².

Kroger has not identified which stores it will sell or shut down. But both companies have indicated that “the purpose of the transaction is to create a more competitive combined company” and Kroger has stated “it has no plans to reduce health care or pharmacy services in Oregon,” according to the analysis ².

In conclusion, if Kroger successfully purchases Albertsons, it could control nearly 30% of Oregon’s retail prescription drug market. The merger would result in a “moderate concentration” of Oregon’s retail prescription drug market, with Kroger commanding nearly 30%, and its nearest competitor holding 13%. The merger would be the latest in an increasingly consolidated health care services market in Oregon and nationally. It would also come as the number of retail pharmacies have dwindled in recent years, sparking particular concern about access in rural Oregon. However, there are concerns about the lack of clarity about which stores will be closed as part of the merger.

1. https://ir.kroger.com/CorporateProfile/press-releases/press-release/2022/Kroger-and-Albertsons-Companies-Announce-Definitive-Merger-Agreement/default.aspx
2. https://www.thelundreport.org/content/kroger-albertson-merger-could-impact-oregon-pharmacy-access
3. https://www.kgw.com/article/money/business/oregon-supporting-washington-lawsuit-albertsons-kroger/283-77f44205-7af8-42b1-af47-fdf526a1fc7e
4. https://www.businessinsider.com/how-kroger-albertsons-merger-impact-workers-shoppers-grocery-inflation-2022-11
5. https://journalrecord.com/2023/09/11/kroger-albertsons-sell-hundreds-of-stores-in-bid-to-clear-merger/