Peltola takes credit for FTC lawsuit against Albertsons-Kroger merger, and supports Jones Act

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In a short speech that she read to a joint session of the Alaska Legislature on Monday, Alaska Rep. Mary Peltola led with the news that the Federal Trade Commission had filed a lawsuit to stop the merger of Albertsons and Kroger grocery stores. She did that, she said.

Albertsons and Kroger announced months ago that they would be selling off at least 14 Albertsons stores (Safeway) in Alaska, in order to assuage the concerns that they would drive prices higher for Alaska if their stores were under one parent company. Peltola failed to mention that aspect of the merger, and focused on higher prices.

Peltola said it was her efforts, and the listening sessions she held to get Alaskans’ voices heard about the merger that resulted in the lawsuit against the two private sector companies. She said breaking up monopolies is the way to go, just like the government did in the old days. She contrasted the grocery store merger to the break up of the American Telephone & Telegraph Company (AT&T) monopoly in the 1980s.

Peltola did not mention that she is following the directions of major unions, which oppose the merger.

In fact, the FTC lawsuit has not much to say about prices and a lot to say about collective bargaining as an antitrust decision point..

The lawsuit says that if the two companies combined, then unions would not be able to pit one store against another during bargaining negotiations.

“In some regions, such as in Denver, the combined Kroger/Albertsons would be the only employer of union grocery labor,” the FTC said. “Union grocery workers’ ability to leverage the threat of a boycott or strike to negotiate better CBA terms would also be weakened.”

Defending union bargaining position is a new frontier for the Federal Trade Commission.

Later in her remarks to the Legislature, Peltola took questions. Asked by Rep. Jamie Allard of Eagle River to comment on the Jones Act, which drives prices higher in Alaska and makes Alaskan goods, such as fish and oil, more expensive to ship south, Peltola said she supports the Jones Act.

Alaska is disproportionately and negatively affected by the Jones Act because of its dependence on waterborne shipping. The Jones Act affects both supplies shipped north to Alaska and crude oil and fish products shipped south.

The Cato Institute, a Libertarian think tank, says “This is not only a direct assault on Alaskan’s freedoms, but their pocketbooks as well. Besides reducing competition, the law forces carriers who ply routes between Alaska and other domestic locales to buy U.S.-built ships that cost as much as eight times more than those from Asian shipyards. In addition, these ships are, on average, estimated to be 2.7 times more expensive to operate than their foreign counterparts.”

In fact, a 1982 analysis conducted for the Alaska Statehood Commission calculated that every Alaskan paid $267 more per year for goods, or more than $1,000 annually for a family of four, because of the Jones Act.

“The state’s oil industry, meanwhile, was found to suffer an additional $600 million inflation‐​adjusted hit. A separate study published by the U.S. Government Accountability Office in 1988 said that the U.S. build requirement alone imposed a cost equal to 2 percent of Alaska’s total personal income,” the Cato Institute says.

The Jones Act requires that domestic cargoes be transported only on U.S.-built, U.S.-flagged, U.S.-owned, and U.S.-crewed ships. Oil cannot be exported from the North Slope without first stopping at a domestic port.

The Act has had a monopolistic effect on shipping to and from Alaska and Hawaii.

“Because the Jones Act severely limits the supply of shipping to and from our communities, it has allowed a very few companies to control our very lifeline to the outside world and as a result command shipping rates way higher than the rest of the world,” said Democrat Rep. Ed Case of Hawaii, another state that suffers from high shipping costs because of its reliance on maritime shipping. Case has worked on legislation to amend the Jones Act.

“Because Jones Act shipping has shrunken and international shipping has increased dramatically, especially in the last quarter-century, the Jones Act results in a very few carriers serving all domestic shipping needs,” Case said.

But Peltola said that in spite of whatever issues it may have, the Jones Act was good for unions, so she supports it.

It turns out, Peltola thinks monopolies are fine, as long as they are run by unions.

The Allard question about the Jones Act was the only question of policy substance from the Legislature. Other questions came from Democrats in the room and focused on things like Peltola’s grieving over the loss of her husband. House Minority Leader Calvin Schrage asked her to expound on why Alaskans should return a Democrat to Congress, allowing Peltola a few more minutes to campaign at the speaker’s podium.

15 COMMENTS

  1. The Jones Act is a 1920 law initiated by Mr Jones of Washington State that limits how cargo is transported by sea requires that cargo shipped between U.S. ports is to be carried by U.S. ships, with American crews.

    It seems that a lot of the recent argument for repeal of the Jones Act centers on the cost of oil and gas from Russia to Hawaii and Puerto Rico when the US banned oil and gas imports from Russia as it seems the folks argue Hawaii imports so much of its oil directly from Russia.

    In one of my first jobs, a co-worker’s father died as a sailor on a ship in Lake Superior. Before then I hadn’t thought about domestic shipping since the ‘Wreck of the Edmund Fitzgerald’. But, I suspect that the real argument about ‘protectionism’ as opposed to ‘globalism’, isn’t that but actually there isn’t that much support of the merchant marines, ship building, and maintenance in general, even compared to military shipping. Personally, since Alaska is surrounded more than 3/4 by the ocean, I could very well see why Ms Peltola is looking out for the best interest of Alaskans and those of the citizens of the USA.

    • What a joke! Alaskans, Hawaiians and Puerto Rivans directly subsidize the U.S. shipbuilding industry because of the Jones Act. It adds thousands of dollars every year to our costs per family in Alaska. I’m not willing to pay for that. Peltola is bought and paid for by the shipping lobby.

      Don’t be a sucker.

      • The USA should be investing more for marine travel ( i.e. cruise ship industry) and transportation e.g. Great Lakes, etc in the interest of national security factors, considering sites of major ports can be super busy (remember all those Sea-Land containers stacked up in CA ports during pandemic?) Depending too much on trucking industry has them sometimes in an unfair disadvantage over other transportation routes.

        • Those containers were stacked up more due to a change in CA law that required the use of cleaner burning prime movers in the tractors that would haul them away; hmm, mere coincidence that it coincided with the big lie that is Covid 19? There were and are ample trucks and drivers to move that freight, but the fruits and nuts in Sacramento are to busy kneeling at the altar or eco-altruism to maintain common sense policies that support commerce in this country.

          Second, if you’re truly worried about the American worker and economy, maybe focus less on who is ‘hauling the goods,’ and more on who is ‘producing the goods.’

  2. Mary hates us, hate her back, vote her OUT. do not rank her AT ALL.
    Zero votes for the idiot that wants to further undermine we citizens of Alaska and America.

  3. The Kroger/Albertson merger will be bad for Alaska consumers. MRAK is obsessed with denigrating unions and conflating them with other issues

    • I think you’re wrong on this Frank. The increased purchasing power of the larger company and the reduced overhead of an excess of stores should allow K-A to better compete with the previously mentioned behemoths. There remains room for the stores/locations sold, though probably not all of them, to thrive just as Red Apple in Mountain View, the Natural Pantry in Midtown Los Anchorage, and the two Sagaya stores have very loyal followings. Come up for breath of fresh air and see that not all the world is as you believe it is and, thankfully, as you believe it should be.

  4. Hmmm, Jones act is what keeps Seattle’s stranglehold on alaskas shipping. Was supposed to be done away with during statehood, just like all of the other lies the feds were supposed to release to alaska with statehood. When are the federal lands going to be turned over to the state? Never.

  5. The Jones Act also impacts the cruising lines as well. It is an anachronism that should have been repealed decades ago. The American shipbuilding industry is not what it was even in the 1950’s. Most ships are being built overseas for a good reason. They have better technology and are much cheaper to build. The Jones Act is a peace of protectionism that no longer works.

  6. Arguments for The Jones Act focused on protecting The US ship building and shipping infrastructure as a national security issue. In 1960 we had about 17% of the world fleet. Now we are down to LESS THAN 1%. The Jones Act doesn’t work, not even at protecting unionized jobs. Get rid of it.

  7. Wayne, denigrating me or my comment lessens the consideration of your valuable comment. If you have some bone to pick about unions state it. Otherwise it is difficult to try to figure out why you would think that if I am a union shill why I would support USA maintaining an updated shipping industry (port upkeep, shipbuilding and repair, sailor expertise). The ExxonMobil Valdez was an early wake up call about the slipping standards in protecting the shoreline and coastal waters. Shipyard union antagonism against the Teamsters could be a problem.

    As for shipbuilding and ships, when my father left for Haines on the USS Adder during the Korean War in the early 50s, the description of the boat ride was nothing but miserable. So, even military vessel upkeep has been a problem. As someone mentioned the difference between 17% and 1% in a business industry is pretty significant. It seems most of the giant cruise ships are registered from Norway and foreign countries … surely the Jones Act affects tourism, as well.

    But, suggesting repeal of Jones does not enhance the overall safety of our borders, does it?

  8. Will any of our elected officials (notice I didn’t refer to them as “leaders”) ever see the light and realize more government does not equate to better government? If the federal government was downsized and forced to remain with constitutional sideboards, you’d see our economy flourish and freedom restored. Get out of our lives Mary!!

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