California probes 'pharmacy deserts' in Kroger's Albertsons deal-sources
By Diane Bartz
WASHINGTON (Reuters) — The California attorney general's office is probing whether Kroger (NYSE:KR)'s $24.6 billion plan to buy rival grocer Albertsons will make it harder for people in poorer parts of cities or rural areas to buy medicines, according to two people familiar with the review.
Food deserts, which are better known, are often working class areas of cities or small towns where people have few options to buy healthy foods like fresh foods or vegetables. Areas can face the same issue with pharmacy access.
Research from the University of Southern California in 2021 found one in three neighborhoods in 30 populous U.S. cities were «pharmacy deserts.»
In urban areas, researchers defined a pharmacy desert as a neighborhood where people had to walk or take a bus more than a half mile to a pharmacy. In areas where people tended to drive, a neighborhood that was more than a mile from a pharmacy would be termed a pharmacy desert.
Two people told Reuters that the California attorney general's office, which is reviewing the planned acquisition for potential violations of antitrust law, has also asked if the deal would mean more or bigger pharmacy deserts in the state. The people declined to be identified because they were not authorized to speak on the record about the conversations.
California Attorney General Rob Bonta has previously said he was «deeply concerned» about the proposed merger.
The deal, announced in October, would create a grocery chain with nearly 5,000 stores, although up to 650 may be sold to win approval for the transaction. Walmart (NYSE:WMT) is the biggest U.S. grocer with 34.8% of the market while a combined Kroger/Albertsons would be No. 2 at 22%, according to Food and Water Watch.
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