State Urges FTC to Reject American-Lucky Merger

State Atty. Gen. John Van de Kamp has urged the Federal Trade Commission to reject the pending purchase of Lucky Stores by American Stores Co., which owns the Alpha Beta supermarket chain.

In a 40-page statement, the attorney general’s office contends that merging the two chains will reduce competition and leave only two powerhouse chains--American and Vons--in Southern California.

In May, the FTC tentatively approved American’s acquisition of Lucky stores and Von’s pending acquisition of Safeway’s 172 Southland stores. Van de Kamp’s office last week submitted comments opposing the proposed Vons and Safeway merger.

The attorney general’s statement was sharply disputed Tuesday in a response by American Stores, which claims that California consumers will save as much as $60 million annually after the acquisition.

“American Stores has made it clear . . . that it intends to maintain, and even expand, Lucky’s successful everyday low price strategy” for all 248 Alpha Beta stores in California, American’s release said. Lucky now operates 343 stores in the state. According to Irvine-based American, the combined chain will pass along to consumers the savings that are made through lower advertising costs and economies of scale in its manufacturing, distribution and warehouse operations.

Van de Kamp acknowledged that the American and Lucky merger will provide some short-term gains. But a statistical analysis by the attorney general’s office “points to significant consumer losses in the long term,” according to the statement.

The eleventh-hour filing was received at the FTC on Monday, the final day of a 60-day period for the public to voice opinions about the $2.5-billion merger. During that time, more than 50 consumers complained about the proposed merger. Virtually all objected because of concern that the consolidation will mean higher prices at supermarket checkout counters.

The FTC will review all of the comments and is expected to make a final decision on the merger within several months.