Ari Armstrong, Business/Economy, Exclusives, Featured, Politics, Uncategorized

Armstrong: Phil Weiser wants to micromanage our food supply

True to form, Colorado Attorney General Phil Weiser, who at one point worked antitrust for the Department of Justice, immediately politicized the proposed merger between Kroger (King Soopers, City Market) and Albertsons (Safeway). Weiser nurtures a deep-seated antipathy to economic liberty and wants government to micromanage important business operations.

Weiser said of the proposed merger, “As Colorado’s attorney general, I take very seriously our department’s responsibility to review mergers that threaten Colorado consumers. At a time of rising food prices, the possibility of undue consolidation in the grocery business raises serious concerns particularly since King Soopers and Safeway have a large footprint in Colorado. My department and I will closely monitor and review this proposed merger between Kroger and Albertsons to ensure it does not harm consumers or workers.”

What hubris. What conceit. What experience has Weiser in the grocery business? What qualifies him to determine which mergers are “due” and which are “undue”?

The only threat in this matter is coming from Weiser. He is literally threatening to unleash the force of government—ultimately backed by armed government agents—to block any business merger that he, in his Godlike wisdom, deems inappropriate.

By contrast, neither Kroger nor Albertsons are threatening anyone, Weiser’s absurd defamation of these companies notwithstanding. Rather, these businesses rely on people walking through the door, whether to work or to shop, voluntarily, as a matter of mutual consent. Interacting by consent rather than by threat of force apparently is a concept alien to Weiser’s worldview.

Grocery competition not a problem

As a practical matter, there is no good reason to worry about this potential merger. Consider an obviously biased report by National Public Radio (NPR). In its first paragraph, NPR claims that Kroger and Albertsons are “the two largest grocery-store chains in the U.S.” But if you read down to the sixth paragraph of the story, you find the following:

“For both companies, Walmart is a key competitor, as a nationwide big-box giant that sells more groceries than Kroger and Albertsons combined. The two also face competitions from Costco as well as Amazon, with its online delivery reach, and lately, dollar stores, the fastest-growing segment of U.S. retail.”

I quickly pulled up some other sources. Danny Sheridan claims, based on data from Numerator, that as of last year, Walmart accounted for 18% of national grocery sales, Kroger 8.8%, Costco 6.4%, Albertsons 4.7%, and various other chains making up the tail. So, even with the merger, Kroger-Albertsons would not come close even to having a majority share of sales (not that government restraints would be justified even if it did).

Axios claims that, for Denver for 2021, Kroger made up 33.6% of grocery market share, Walmart 16.5%, Safeway 11%, Costco 10.4%, Target 10%, Sam’s Club 6.6%, Whole Foods 3.8%, and so on. Competition in the grocery market simply is not a real problem.

In my suburban neighborhood, the nearby Safeway closed down some years ago. Still, I can easily travel not only to King Soopers and to a different Safeway but to Sprouts, Whole Foods, Costco, Walmart, Target, Natural Grocers, and H Mart, among others. With a bit of a commute I also can shop at Sam’s Club (although I am not currently a member) and Trader Joe’s. Moreover, I easily can place an online grocery order through Amazon (which owns Whole Foods). I can also order food, if I like, online from any number of sellers.

Okay, what about more-rural areas? Colorado Public Radio reporter Stina Sieg worries, “This means Safeway and City Market/King Soopers would be owned by the same company. I wonder how this would play out in smaller cities with both conglomerates already (looking at you, Junction and Durango, and I’m sure many others).”

Google “Grand Junction grocery,” and you will find, in addition to City Market and Safeway, Walmart, Natural Grocers, Sprouts, and Family Food Town (in Palisade), in additional to various convenience stores with limited supplies. Around Durango there’s Walmart, Natural Grocers, Family Dollar, and Durango Natural Foods Co-op.

Let us say, for sake of argument, that a grocery merger would result in a bump in prices somewhere in Colorado. So long as we are talking about consensual transactions, as we are, this is simply not something that should concern government agents.

Weiser the Meddler

If Weiser doesn’t like how existing stores do business, he is welcome to start a competing store. Probably he would fail miserably at that, as store owners have to rely on their ability to persuade people, rather than an ability, so finely honed by the likes of Weiser, to threaten peaceable people with brute force.

Anyway, temporary price bumps typically encourage competitors, so this is a “problem” that tends to be self-correcting.

Meanwhile, Weiser has not a single critical word to say about his fellow Democrats in the legislature who have imposed senseless, price-raising controls on Colorado’s agricultural businesses.

Some people might remember the ridiculous federal interference some years ago in the merger between Whole Foods and Wild Oats. Although these stores combined represented a tiny fraction of the total grocery market, the FTC obsessed about this merger and about the so-called “natural” market, a largely arbitrary subcategory. But bureaucrats will bureaucrat. A line from the New York Times illustrates the absurd farce that is government micromanagement of business transactions:

“Since the F.T.C. first challenged the merger in June 2007, Whole Foods has increasingly lost its hold on the organic and natural foods marketplace. Larger competitors like Safeway and Kroger have vastly expanded their store-brand offerings of natural and organic products, and they are often cheaper than those at Whole Foods.”

But meddlers such as Weiser, who imagine themselves more clever than people interacting consensually in a market, never learn. Business in a free market operates at the speed of thought. Government lawyers couldn’t keep up even if doing so was their aim. Weiser and the government’s army of micromanagers, despite their faux sophistication and lawyerese, operate at comparable acuity, and by the same basic means—the threat of force—as a street thug.

Ari Armstrong writes regularly for Complete Colorado and is the author of books about Ayn Rand, Harry Potter, and classical liberalism. He can be reached at ari at ariarmstrong dot com.


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