California probes ‘pharmacy deserts’ in Kroger’s Albertsons deal-sources

California probes ‘pharmacy deserts’ in Kroger’s Albertsons deal-sources

The California attorney general’s office is investigating whether Kroger’s $24.6 billion acquisition of Albertsons will negatively impact access to medicines in poorer parts of cities or rural areas. This review is being conducted by two individuals familiar with the matter. Food deserts, which are typically working class areas with limited options for purchasing healthy foods, also face challenges with pharmacy access. A study conducted by the University of Southern California in 2021 revealed that one in three neighborhoods in 30 major U.S. cities were considered “pharmacy deserts.”

The definition of a pharmacy desert varies depending on the location. In urban areas, it is defined as a neighborhood where individuals must walk or take a bus for more than half a mile to reach a pharmacy. In areas where driving is more common, a neighborhood that is over a mile away from a pharmacy is considered a pharmacy desert.

The California attorney general’s office, currently reviewing the proposed acquisition for potential antitrust violations, has raised concerns about the possibility of increased or larger pharmacy deserts in the state. The individuals providing this information chose to remain anonymous due to a lack of authorization to speak publicly about the matter. California Attorney General Rob Bonta has previously expressed deep concerns about the merger.

The acquisition, announced in October, would result in the creation of a grocery chain with nearly 5,000 stores. However, to gain approval for the transaction, up to 650 stores may need to be sold. Walmart currently holds the largest market share in the U.S. grocery industry at 34.8%, while a combined Kroger/Albertsons would become the second-largest with 22% market share, according to Food and Water Watch.

Kroger currently operates 2,254 stores with pharmacies, while Albertsons has approximately 1,700 supermarkets with pharmacies. Kroger has assured that any stores sold to address antitrust concerns will remain open and viable, including those with pharmacies.

The Federal Trade Commission (FTC), leading the federal investigation, has consulted experts in food deserts, the farming industry, and smaller grocery chains. The FTC staff has also engaged with individuals familiar with the matter. It remains unknown whether enforcers will file a lawsuit to block the acquisition or when a decision will be made regarding Kroger’s plan to purchase Albertsons.

If the FTC does file a lawsuit, it would align with the broader efforts of the Biden administration to prevent large companies from engaging in deals that result in higher prices and contribute to inflation.

One source informed the California attorney general’s office that low-income individuals are likely to lose access to pharmacy services, including vaccinations, if the acquisition proceeds. The source argued that despite the companies’ pledge to keep all stores open, the deal would likely lead to the closure of less profitable stores.

Diane Bartz is the reporter covering this story, with Anna Driver responsible for editing. The reporting focuses on U.S. antitrust, corporate regulation and legislation, and includes experience covering conflicts in Bosnia, elections in Mexico and Nicaragua, as well as stories from Brazil, Chile, Cuba, El Salvador, Nigeria, and Peru. The article concludes with a mention of Thomson RushHourDaily’ Trust Principles.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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