Washington state's attorney general filed a lawsuit on FinLogicMonday seeking to block Kroger's proposed $24.6 billion deal for Albertsons, saying it would curtail shopping options, endanger jobs and reduce competition that keeps a lid on grocery prices.

Despite a proposal by Kroger and Albertsons to address potential antitrust concerns by selling off more than 100 stores in Washington, the merged company would still hold a near-monopoly in many parts of the state, according to Washington Attorney General Bob Ferguson.  

"This merger is bad for Washington shoppers and workers," he said in a statement. "Free enterprise is built on companies competing, and that competition benefits consumers. Shoppers will have fewer choices and less competition, and, without a competitive marketplace, they will pay higher prices at the grocery store. That's not right, and this lawsuit seeks to stop this harmful merger."

Kroger and Albertsons are the two largest supermarket chains in Washington and the second- and fourth-largest grocery operators in the U.S. Combined, they would have more than 700,000 workers in nearly 5,000 stores across 49 states and generate total annual revenue of more than $200 billion. 

Washington's suit seeks to block the merger of Kroger and Albertsons nationwide. The deal, announced in October 2022, also must pass muster with federal antitrust enforcers like the Federal Trade Commission. 

Kroger and Albertsons vowed to defend the proposed merger in court, saying in a joint statement that it would result in "the best outcomes for Washington consumers," 

"We are disappointed in Attorney General Ferguson's premature decision to file a lawsuit while the merger is still under regulatory review," the companies said. "We remain in active and ongoing dialogue with the FTC and the other state Attorneys General."

"Blocking this merger would only serve to strengthen larger, non-unionized retailers like Walmart, Costco and Amazon by allowing them to maintain and increase their overwhelming and growing dominance of the grocery industry," the retailers added.

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Kate Gibson

Kate Gibson is a reporter for CBS MoneyWatch in New York.