The Federal Trade Commission filed a lawsuit Monday to block a planned merger of grocery giants Kroger and Albertsons, saying the $24.6 billion deal would eliminate competition and lead to higher prices for millions of Americans.

Kroger fired back that blocking its takeover of Albertsons, which owns 19 Shaw’s supermarkets in Maine, actually would harm the very people the FTC purports to serve: America’s consumers and workers.

The FTC filed the lawsuit in U.S. District Court in Oregon, joined by the attorneys general of eight states and the District of Columbia, The Associated Press reported.

“Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today,” Henry Liu, director of the FTC’s Bureau of Competition, said in a statement.

The FTC said the proposed deal, which would be the largest grocery merger in U.S. history, also would erase competition for workers, threatening their ability to earn higher wages, better benefits and improved working conditions.

The federal action Monday follows lawsuits filed earlier this year in Colorado and Washington state that aimed to block the merger. States that joined the federal effort are Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming.

Kroger executives say the merger would have a very different outcome, and that the federal lawsuit makes it more likely that American consumers will see higher food prices and fewer grocery stores at a time when communities across the country are already facing high inflation and food deserts.

“In fact, this (lawsuit) only strengthens larger, non-unionized retailers like Walmart, Costco and Amazon by allowing them to further increase their overwhelming and growing dominance of the grocery industry,” Kroger said in a statement Monday.

“The proposed merger with Albertsons will produce meaningful and measurable benefits for customers, associates and communities across the country,” Kroger said. “The combined company (has) committed that no stores, distribution centers or manufacturing facilities will close as a result of the merger, including those divested to C&S Wholesale Grocers.”

Customers will benefit from lower prices and more choices following the merger close, Kroger said. The company has committed to investing $500 million to begin lowering prices day one post-close, and an additional $1.3 billion to improve Albertsons company stores.

“Kroger’s business model is to take costs out of the business and invest in lowering prices for customers,” the company said in a statement Monday. “Kroger has reduced prices every year since 2003, resulting in $5 billion invested to lower prices and a 5% reduction in gross margin over this period.”

This business model is immediately applied to merger companies, Kroger said, adding that Kroger has a proven track record of lowering prices so more customers benefit from fresh, affordable food.

“Our proposed merger with Albertsons will mean even lower prices and more choices for America’s consumers,” Kroger stated.

Kroger and Albertsons, the nation’s largest supermarket operators, agreed to merge in October 2022. The companies said a merger would help them better compete with Walmart, Amazon, Costco and other big rivals. Together, Kroger and Albertsons would control around 13% of the U.S. grocery market; Walmart controls 22%, according to J.P. Morgan analyst Ken Goldman.

In an effort to satisfy federal regulators, Kroger and Albertsons announced in September that they will sell 413 stores, eight distribution centers, two offices and other assets for about $1.9 billion to C&S Wholesale Grocers, which supplies more than 7,500 food sellers, including over 500 independent Piggly Wiggly grocery stores.

Cincinnati-based Kroger is the nation’s largest supermarket operator, with about 500,000 associates among 2,750 stores in 35 states, including the Ralphs, Dillons and Harris Teeter chains. Albertsons, headquartered in Boise, Idaho, is the second largest, with about 290,000 associates among 2,272 stores in 34 states, including the Star Market, Shaw’s, Safeway and Vons chains.

In addition to lower prices, promised improvements include more fresh food choices, long-term job security, higher wages, expanded benefits and a strong unionized workforce for associates.

The merger comes as Maine’s supermarket landscape continues to diversify, with the opening last year of the state’s first Costco in Scarborough, and further growth and consolidation among Shaw’s, Hannaford, Market Basket, Target, Walmart and independent grocers across the state.

None of more than 5,500 supermarkets related to the merger is targeted for closure, but company executives aren’t saying exactly what the impact will be on the 127 Shaw’s stores across New England.

Founded in Portland in 1860, Shaw’s hasn’t responded to requests for comment on the lawsuit. Neither Albertsons nor Kroger have answered specific questions about the potential impact on Shaw’s, other than to say they don’t expect the chain’s stores in Maine to change as a result of the merger.

But the merger, announced at a time of high food-price inflation, was bound to get tough regulatory scrutiny. U.S. prices for food eaten at home typically rise 2.5% per year, but in 2022 they rose 11.4% and in 2023 they rose another 5%, according to government data. Inflation is cooling, but gradually.

Still, the United Food and Commercial Workers union, which represents 835,000 grocery workers in the U.S. and Canada, voted last year to oppose the merger, saying Kroger and Albertsons had failed to be transparent about the potential impact of the merger on workers.

The union was also critical of a $4 billion payout to Albertsons shareholders that was announced as part of the merger deal. Several states, including Washington and California, tried unsuccessfully to block the payment in court, saying it would weaken Albertsons financially.

Kroger and Albertsons had hoped to close the deal early this year. But the two companies announced in January that it was more likely to close in the first half of Kroger’s fiscal year, which started in February.

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