Kroger, the massive grocery store chain,
has announced that they intend on acquiring Albertsons for
the small price of just $24.6 billion.
Now, this merger, if it were to go through, would have disastrous impacts on
the cost of food for hundreds of millions of Americans across the country.
But first, it's important to understand and note that Kroger and
Albertsons already have many subsidiary brands.
So Kroger brands include Ralph's, Dillions, Food 4 Less, Fred Meyer,
Harris, Teeter, King Soopers, Mariano's, and several more.
Albertsons, boasted by a 2015 merger with Safeway or boosted, I should say,
with the 2015 merger with Safeway, has that chain in its stable, along with Acme,
Haggen, Jewel-Osco, Shaw's, Pavilions, Vons, and many more.
So they're already these major grocery conglomerates, right?
Grocery stores or grocery chains, I should say,
eating up smaller grocery chains, and that does what?
It leads to a lack of competition.
It creates a monopoly.
And this potential merger would make thing even worse.
Now, congressional testimony this January from
the National Grocers Association indicates that over 60%, 60%,
of all American grocery sales are concentrated in just five companies.
Amazon, Walmart, Kroger, Albertsons and Ahold Delhaize,
a Dutch grocer that owns several brands like Giant, Food Lion, and Stop & Shop.
Now, if Kroger and Albertson's were to merge,
that merged company would control 16% of the national market, okay?
In some local markets, the merged company and
Walmart combined would control upwards of 90% of the market.
So it depends on where you are in the country.
And that's really bad,
because if there's a monopoly in regard to these grocery stores,
that means that they can charge whatever they want for the products they carry.
And you're not gonna have very many options, because even though there might
be the illusion of options, different branding when it comes to the store
itself, it's really under the same umbrella, the same company, in reality.
Now, just look at how the leadership at Kroger and
Albertson's talk about inflation.
This is an important part of the story, I would argue, the most important,
because this is what their whole objective is.
Last summer, Kroger CEO,
Rodney Mcmullen said that a little bit of inflation is always good in our
business because customers don't overly react to increases in prices.
That's a really interesting take because people are definitely reacting to
the inflation, especially when it comes to putting food on the table for
themselves and their families.
But the thing is, people feel incredibly powerless because we have really not
a two party system, but a one party pro corporate system in America,
that protects the price gouging that's currently taking place right now.
Kroger's CFO, Gary Millerchip, told shareholders in October, quote, we've been
very comfortable with our ability to pass on the increases we've seen at this point.
And we would expect that to continue to be the case, end quote.
>> That's devastating.
>> Yep.
>> Okay, so there's two different issues here.
One is monopoly power, and two is the corruption in our system,
related to inflation, okay?
And this is just a textbook case of it.
So he's telling you, we're very comfortable passing on
everything to you guys, literally, that's exactly what he said.
Now, what do they pass on to you guys?
So, egg prices are up 30.5%, that's gigantic, okay?
Chicken is up 17.2%, coffee is up 15.7%, and the list goes on and on.
So now, Republicans and Democrats will tell you different things.
Actually, Republicans and Progressives,
Democrats generally agree with Republicans.
So, Republicans and neoliberal Democrats say,
there's nothing the businesses can do.
The poor businesses, they're the ones that are suffering.
Its economic forces and your wages are too high, and that's what's causing inflation.
Now, that could be true by the way, of course, sometimes the price of supplies go
up and then at that point you might not make a profit anymore.
So, is that the case in this situation?
Nope.
Both for Kroger's and Albertsons, and by the way,
almost all of the industries, none of them are showing losses,
they're all showing, not only profits, record profits.
But wait, if inflation was causing it, they'd be in dire straits,
we don't have a choice, I have to increase the price, otherwise I'm losing money.
And if I lose enough money, I'll go bankrupt, but
that's not the situation at all.
>> Correct.
>> They're making record profits.
And they're bragging openly saying, yeah, the people will take the price increase.
Why, why are the people going to take the price increases?
Number one, they have an oligopoly.
>> Yeah, they have no choice.
>> They have no choice at all, on two fronts.
One, in a place like LA, for example,
almost every supermarket is Ralphs and Vons and Pavilions.
So first of all, if they would merge, then you would have a monopoly and
not an oligopoly.
You would have no choice at all. But
right now you basically have only two choices,
is these companies that work together all the time.
They set very similar prices so that you have the illusion of choice
without actually, why didn't they acquired all those companies in animation?
Why didn't they change their names?
Cuz they like the illusion of choice.
>> Yes, the illusion of choice is really important to grasp when it comes
to capitalism.
Because what we usually hear about when it comes to, let's say a communist system,
like in Cuba, one of my favorite memes that goes around by right wingers is
grocery store aisle in Cuba.
I forget what the product is, but there's one brand.
You have no other choice, one brand.
But you look at the major corporations that basically have all these
brands within their umbrella, they might have different branding for
the same product, but it's the same company making the product.
You get what I'm saying?
>> Yes. >> So we have the illusion
of choice here in the United States, whereas in Cuba it's, or
in a communist country where there's one brand, it's, no,
this is the reality of the situation, you got one brand.
>> But either way- >> Either way it's bad.
>> The prices are the same, right?
>> Yeah.
>> Now, in terms of, again,
there's a second factor in why you have no choice.
One is, it's an oligopoly, two is the government.
The government is never held accountable because moneyed interests have
completely seized the government, including most importantly,
it's not people of a particular race or ethnicity, no, it is corporations.
They have completely controlled our government.
So that's why their CEOs brazenly go out on calls and go,
we have them under complete control, there's nothing they could do.
We're passing on the prices to them.
We're super comfortable.
Their representatives are our servants, right?
They didn't mention that part but it's super obvious.
And so, there's no way they could ever fight back.
They brag.
Now, last thing about inflation.
So when they merge, one of the CEOs has to go.
One of them will stay and run the company.
But it turns out it's- >> I've got those numbers, because that-
>> Ana, read the numbers and
then I'm gonna make a comment about it.
>> That Golden Parachute is real sweet.
Real sweet.
So, the merger would hurt average Americans and
obviously make the ultra wealthy even richer, Kroger CEO, Rodney Mcmullen,
would take over as CEO of the combined company if the merger goes through.
But Albertsons CEO, Vivek Sankaran,
stands to gain a $50 million golden parachute in the deal.
Meanwhile, Albertsons parent company, private equity giant,
Cerebral Capital Management, will earn a windfall to,
perhaps as much as $7 billion.
>> So if the inflation was actually causing the price hikes,
you'd never be able to extract $7 billion dollars from grocery stores.
So grocery stores would be the most affected,
they'd be most on the razor's edge of sustainability, right?
This is just business 101.
They're not anywhere near the razor's edge.
They're taking $7 billion out in bounty, because they're like, good inflation,
we get to charge more and there's nothing they can do about it, right?
And the only one, of course fighting on this is Bernie Sanders, saying,
it's the price gouging.
And everybody, of course the world is collapsing in on him,
because almost all the media is owned by corporations,
not just the corporate hacks like CNN, Fox News, what do you think they are?
They're giant corporation.
They're part of the same propaganda.
They're like, don't listen to Bernie Sanders, inflation is really bad.
But it's not the companies, it's your fault, the wages are too high.
They're liars.
Finally on the $50 million, at least on this portion of story.
Guys, if they were hurting and they had to pass on the price increases to you,
do you think they'd have $50 million dollars
lying around to give someone who's leaving?
They don't have to give them anything.
They're choosing to give him $50 million dollar gift on his way out cuz
they're like, nice job, basically, totally exploiting the customers.
And so, allowing this would be mental, you cannot let them merge.
There's good news on that front though.
>> Yeah, the good news is, and this was actually a shocking statistic for me,
because of how pro corporate this country really is.
But it turns out that somewhere between 70% to 90% of proposed
mergers actually fail.
So the antitrust division of our government apparently is
doing an okay job.
But when you take a step back and
you look at some of the biggest mergers over the last few decades, they've been
pretty devastating in terms of prices and inflation for the American people.
So I can't imagine how many proposed mergers they're dealing with on a regular
basis to get a percentage that high, but it's really important for
this particular merger to fail.
>> Yeah, so there's a lot of nuance there, real quick.
A lot of the small ones failed, the giant corporations basically own the government,
except for the FTC under Biden.
So we often criticize Biden, I don't think he does enough.
But man, he picked someone great for the FTC.
It's Lina Khan, and she's against monopolies.
She said that so many monopolies that are dangerous and
an overly large should be blocked, and she's very likely to block this one.
Unfortunately, there's always a bad turn, right?
She's not the final voice.
She's the penultimate voice, the final voice is the courts.
And so, the courts, of course, are completely controlled by corporations.
Again, corporate media never told you that, I write all about it in my upcoming
book, justicecomingbook.com, about how they captured the courts.
And so, the courts keep going, I don't see any monopolies, anybody see a monopoly?
They own 60% of the market.
I don't see it, we're good.
Almost all the people on the courts were selected cuz they were in favor of giant
corporations.
They were picked by corrupt Republicans and oftentimes, corrupt Democrats,
to do just that.
So, Lina Khan will almost certainly strike this down,
then it will go to the courts, this one is so
egregious that even the courts might say, no, no, you can't do this one.
But you gotta cross your fingers on that one.
The courts are so pro corporate, and it might go to the Supreme Court,
the Supreme Court is the most pro corporate.
>> Absolutely, yes.
And a couple of Supreme Court Justices, remember,
were picked cuz they allowed corporations to kill their employees.
>> Literally. >> Literally, okay?
And so, if it goes all the way to the Supreme Court, they might be, I love it,
why can't they get 100% of the market, right?
So the jury's still out on this overall.