OPINION:
Because many prominent grocery chains appear to be regional, some Americans might not realize that their local chain is anything but local.
Ralphs, Dillons, Smith’s, King Soopers, Fry’s, QFC, City Market, Owen’s, Jay C, Pay Less, Baker’s, Gerbes, Harris Teeter, Pick ’n Save, Metro Market and Mariano’s all belong to the same corporation: Kroger.
Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets and Balducci’s are all under one corporate umbrella: Albertsons.
If consumers believe there is any semblance of competition in their food stores, they are sorely mistaken. It is even odder that some politicians in Washington, led by Sen. Roger Marshall, Kansas Republican, are pushing legislation that purports to strive for “competition” in one market but would give massive benefits to these supermarket behemoths in the form of higher profits — profits fueled by higher prices that also contribute to the inflation eating into consumers’ buying power.
The bill is the so-called Credit Card Competition Act of 2023, known as CCCA, and is the same legislation that was introduced last Congress but failed to gain any real traction.
CCCA would allow giant retailers such as Kroger, Albertsons and Target to take freedom and choice away from consumers by deciding which network their credit card transactions are processed through. If you were to choose a specific card on Visa’s or Mastercard’s network because you value its security and fraud protection or the cash back and rewards you earn, a retailer could send your information over a cheaper, less secure network without your knowledge.
This would allow major retailers to increase their profits by choosing cheaper, less secure networks at the expense of consumers. The result would end the peace of mind of knowing your credit card purchases are well protected, along with the cash-back and travel rewards programs that many Americans use to offset the rising cost of food, school supplies and well-earned vacations.
Last October, Kroger and Albertsons announced a merger agreement that would create what many correctly deem a monopoly. The combined companies would operate nearly 5,000 stores across 48 states.
Why would politicians introduce a “competition” bill with such a clear and obvious benefit for the country’s supermarket monopoly? Perhaps that question should be put to the bill’s sponsor, Mr. Marshall.
This past March, months before Mr. Marshall’s failed bill was reintroduced, he accepted thousands in campaign contributions from the bill’s staunchest supporters, including several thousand dollars from Kroger. Between his campaign and political action committee, Mr. Marshall has received at least $126,000 from supporters of CCCA in the retail industry, including Kroger, Target, Walmart, Amazon and Home Depot — all major corporations, not small businesses.
One of Kroger’s primary subsidiaries is Dillons, a grocery chain started in the early 20th century by the Dillon family in Hutchinson, Kansas. Kroger acquired Dillons in 1982 and hasn’t hesitated to exploit its Kansas ties.
After CCCA was introduced in 2022, Dillons hosted a meeting between Mr. Marshall, the National Association of Convenience Stores, and other merchants and trade association executives to discuss the bill and push Kroger’s agenda for upending the current credit card payments system to boost their bottom line.
The irony is that Kroger exploits its Kansas ties and values while practicing anything, but Kroger’s CEO was under fire last year in congressional testimony about the proposed merger with Albertsons. Sen. Tom Cotton, Arkansas Republican, grilled CEO Rodney McMullen over the company’s alleged “woke” policies and claims that it fired employees who refused to wear LGBTQ symbols.
It is clear that Mr. Marshall is a friend of the Kroger corporation since he has held meetings at the company and accepted significant campaign contributions over the years. But that is not a good enough reason to pass legislation that would benefit the country’s largest supermarket chain at the expense of American consumers, who are already struggling with soaring grocery bills.
Congress should once again reject this failed idea.
• Andrew Langer is president of the Institute for Liberty.
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