By Trevor Hunnicutt

WASHINGTON (Reuters) – A Biden administration bid to dam grocery store chain Kroger (NYSE:)’s $24.6 billion deal to purchase rival Albertsons (NYSE:) might have outsized influence in two inflation-weary 2024 election battleground states, Nevada and Arizona.

The grocers have dozens of shops within the Western states, and individuals who dwell there already pay a number of the largest grocery payments within the nation.

Democrats are hoping to grab on tanking the merger as an election-year triumph, courting unions fearful about dropping jobs and easing People prime concern about U.S. President Joe Biden’s re-election: anger that costs are too excessive.

The U.S. Federal Commerce Fee is joined in its lawsuit to dam the deal by eight states, together with Arizona and Nevada, who argued it could increase grocery costs for tens of millions of People and improve the mixed chain’s leverage in pay negotiations with staff. Each states have Democratic attorneys normal.

Even earlier than the lawsuit, Biden and the White Home had railed towards supermarkets and different companies for holding on to an excessive amount of revenue, promoting smaller merchandise for a similar value or tacking on junk charges.

Biden financial adviser Jon Donenberg mentioned in a press release on Monday that, whereas the White Home couldn’t touch upon pending litigation, Biden believes that firms have to be “checked by wholesome competitors” and that “Biden is dedicated to decreasing grocery prices for households utilizing each instrument at his disposal.”

The Democratic president’s marketing campaign regards each Arizona and Nevada as among the many most intensely aggressive in November’s election, the place a mixed 17 Electoral Faculty votes are up for grabs towards the 270 wanted to win towards possible Republican opponent Donald Trump. Biden’s and Trump’s campaigns declined to remark.

In Nevada, the place Census information exhibits households spent the second-most on groceries within the nation at $295 per week, Biden has been attempting to woo unions and Latino voters after profitable the state by slim margins in 2020.

The dynamic is analogous in bordering Arizona, the place grocery payments are additionally above the nationwide common. That state can also be house to one of many extra aggressive 2024 races that can decide management of the Senate.

“We should not enable billion-dollar firms to rake in earnings whereas Arizonans endure from rising meals prices,” mentioned Democratic Consultant Ruben Gallego of Arizona, who’s operating for the Senate seat.

The grocers have argued the deal’s collapse would solely assist non-unionized retailers like Walmart (NYSE:), and undermine plans by a mixed retailer to chop costs.

However the United Meals and Business Staff Worldwide Union, which represents greater than 1 million staff within the grocery and different industries in North America, opposes the deal. Biden has courted the UFCW they usually endorsed his re-election bid final 12 months.

U.S. meals costs have risen by 25% during the last 4 years, and whereas meals inflation is displaying indicators of cooling off in 2024, grocery payments have grow to be a rising concern for consumers – and voters.

The White Home has mentioned that whereas eggs and milk are a tiny share of what customers spend in a given month, folks pay very shut consideration to them.

A White Home evaluation of Census information exhibits food-and-beverage retailers’ revenues as a share of their prices have risen sharply from earlier than the pandemic to a stage not seen for the reason that mid-2000s, a measure that they are saying extra straight tracks retail mark-ups.