FTC Requires Albertson’s Supermarkets to Sell Two Texas Stores as a Condition of Acquiring Regional Grocery Chain United

The Federal Trade Commission will require the parent company of Albertson’s LLC, AB Acquisition LLC, to sell two stores in Texas to settle charges that its proposed acquisition of United Supermarkets LLC is likely to substantially lessen competition in violation of Section 5 of the FTC Act and Section 7 of the Clayton Act.  

Albertson’s operates 606 grocery stores, primarily in the southern and western United States. In Texas, Albertson’s operates 72 supermarkets under the Albertson’s banner. United is a regional grocery retailer with 51 traditional and specialty supermarkets and seven convenience stores across North and West Texas. United operates its supermarkets under three different banners:  United Supermarkets, Market Street, and Amigos.

According to the FTC’s complaint, the proposed merger of Albertson’s and United is likely to reduce competition in local grocery markets within Amarillo and Wichita Falls, which would harm consumers through higher prices, lower quality and reduced service levels. To preserve competition in these markets, Albertson’s will sell its lone stores in Amarillo and Wichita Falls, Texas, to MAL Enterprises, Inc., which operates under the Lawrence Brothers IGA, Cash Saver and Save-A-Lot supermarket banners. The divestitures must be completed by the later of January 13, 2014, or 10 days following Albertson’s merger with United.

In addition to the required divestitures, the proposed order includes provisions designed to ensure that MAL Enterprises is well positioned to compete in Amarillo and Wichita Falls. For example, the proposed order prohibits Albertson’s from interfering with Lawrence Brothers’ hiring or employment of current employees in the two stores for one year. The order further requires Albertson’s to notify the Commission of any plans to acquire a supermarket in Amarillo or Wichita Falls for 10 years.

The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through Jan. 22, 2014, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments can also be submitted electronically.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau of Competition about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., N.W., Room 7117, Washington, DC 20001. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.