In 2013, she blamed the “chocolate oligopoly” for a scarcity of sweet makers in an article for Time Journal
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Printed Aug 29, 2024 • Final up to date 14 minutes in the past • 3 minute learn
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Years earlier than she turned the chair of the U.S. Federal Commerce Fee, Lina Khan lamented a scarcity of competitors in sweet.
Her views achieve new relevance now that she leads the company that’s anticipated to take a troublesome have a look at whether or not Mars Inc. must be allowed to purchase Cheez-It maker Kellanova for practically US$36 billion, the biggest packaged meals deal in years.
The tie-up would catapult Mars into the highest ranks of the trade behind Unilever Plc, PepsiCo Inc. and Nestle SA. The businesses say they’ve “complimentary” portfolios and the transaction would assist Mars broaden its snack choices past chocolate.
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In 2013, Khan wrote a chunk for Time Journal blaming the “chocolate oligopoly” for a scarcity of sweet makers. On the time she was a junior staffer at New America, a progressive, Washington-based suppose tank.
Of the 40-odd manufacturers of sweet obtainable at her native Safeway, “nearly all of them are produced by considered one of three corporations: Hershey, Mars, and Nestle, with a specialty product or two by Ferrara and Palmer’s Firm,” Khan wrote.
She floated an answer: “We may begin by reviving a few of our antitrust legal guidelines, which we historically used to create a stage enjoying area amongst corporations, no matter measurement.”
Over a decade later, Khan is on the forefront of the push to reinvigorate competitors from her perch on the helm of the U.S. antitrust and shopper safety company.
Given the inflationary atmosphere, the FTC is more likely to take a tough have a look at the deal’s potential impression on shopper meals costs, mentioned James Weingarten, an antitrust accomplice at Milbank.
“They will look exhausting product-line by product-line,” mentioned Weingarten, who was the lead litigator on the company’s case in search of to interrupt up Kroger Co.’s proposed takeover of Albertsons Cos., the biggest U.S. grocery store deal ever, earlier than departing in June.
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The FTC declined to touch upon its evaluate of the transaction. The company has 30 days after Mars and Kellanova submit the deal for its required antitrust evaluate to resolve in the event that they need to pursue an in-depth probe.
Kellanova CEO Steve Cahillane downplayed the potential antitrust threat.
“In the event you simply take a stroll down the aisle within the grocery store of the bars, it’s an extremely fragmented house, with plenty of selections for shoppers, and it’s actually the one overlap that we’ve,” Cahillane informed CNBC in an interview, including that Kellanova “will work with the FTC, and we don’t foresee any points.”
Mars mentioned it will work with regulators and doesn’t count on any “important hurdles to regulatory approval.”
“This transaction unites two corporations with complementary portfolios of merchandise throughout a number of geographies and can result in better innovation and extra snacking selections for shoppers,” the corporate mentioned in a press release.
Kellanova declined to remark.
Whereas Mars and Kellanova have little overlap in chocolate, the 2 corporations compete closely in snack bars, between the Nutri-grain and Nature’s Bakery manufacturers, and in protein bars between KIND and RXBAR.
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The businesses might be able to resolve the competitors points by divesting one of many overlapping manufacturers, mentioned Jennifer Rie, Bloomberg Intelligence’s antitrust analyst.
However the deal additionally comes amid historic ranges of grocery inflation, with meals costs among the many key drivers of financial discontent since most households store for groceries a number of instances each week. Some antitrust advocates are pushing the FTC to dam the merger.
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“This deal, seemingly in response to growing grocery retail focus, represents one more alarming step within the cycle of consolidation that drives up meals costs for small companies and shoppers throughout the nation,” mentioned Morgan Harper of the American Financial Liberties Challenge, an advocacy group near Khan.
Meals costs are additionally within the political highlight because the presidential contest heats up. Vice President Kamala Harris has embraced insurance policies aimed toward lowering meals costs in her marketing campaign, calling for a federal ban on meals and grocery value gouging – and better antitrust enforcement on meals mergers.
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