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In a story about how Albertsons has reacquired 30 of the stores that it sold to Haggen back when it bought Safeway, a result of Haggen's inability to manage a rapid expansion that resulted in a near total competitive meltdown, the Seattle Times takes a look at how the Federal Trade Commission (FTC) may deal with future mergers, acquisitions and dispositions.

The Times writes that the Albertsons-Haggen situation, experts say, "underscores not only how the FTC made a disastrous bet, but also how it’s become more difficult to encourage diversity among traditional supermarkets. In recent years the industry has consolidated into gigantic chains as a response to competition from the likes of Costco Wholesale, Wal-Mart and even Amazon Prime.

"Diana Moss, president of the American Antitrust Institute, a Washington D.C.-based nonprofit, says that it was regulators’ leniency to mergers over the past two decades that led to this problem. 'The fewer competitors, the harder it is to find a viable buyer of the assets that can fully restore the competition lost by the merger,' Moss said."

And Daniel McInnis, a lawyer specializing in antitrust cases, tells the Times that "the well-publicized debacle will probably result in higher standards being imposed on future supermarket mergers ... It’s hard to predict what further requirements the agency might impose, but one possibility is having an independent trustee find a buyer for the stores that supermarket chains are required to divest when they merge, McInnis said. (Right now, the merging companies find a buyer and the FTC approves it.)"
KC's View:
I guess the workability of this last concept very much depends on who that independent trustee is; it wouldn't be surprising to see the FTC choose one who does not really reflect modern competitive realities, which won;t help anybody.

I do think that regulators have a role in making sure that consumers are protected when mergers and acquisitions occur, but I also think that people a lot smarter than I am have to assess competitive realities within the context of a robust e-commerce climate that redefines markets. I'm not saying that the regulators have to go all laissez-faire on us, but I do think they at least have to understand the world as it exists.