Lina Khan and the FTC are at it again, again. Not only are they currently going after the merger between Albertsons and Kroger, they are now going after the potential purchase of Subway.
Elizabeth Warren Wants the Government To Investigate America's 'Sandwich Shop Monopoly'
The FTC puts your lunch on its plate
FTC Fights Grocery Store Merger That May Bring Down Prices
Listen to this episode on your favorite podcast app!
Transcript:
[00:00:00] from Politico, the FTC puts its lunch on your, wait, puts your lunch on its plate. It's got to be your lunch. Before you get to this though, honestly, the only reason I brought it up was to bring up my debate.
Oh, okay. Yeah. I've selfishly. The one that you lost? Yeah. I didn't, now I lost the debate, but it doesn't mean I wasn't right. Mm hmm. So. That's true. That's the way to look at it. There's always a little win in every loss, you know. You could sit and sulk in a corner about your loss. Or you could sit in the corner and realize how right you were about your loss and move on with your day.
So anyway, plus I want people to go listen to the podcast. Yeah, you should go listen to Good Morning Liberty on your favorite podcast app. Or you can find this entire episode, if you're listening on the radio right now, you can go to the Free Talk Live podcast channel and you can listen to the entire episode.
In case you have to, you know. Get out of your car or whatever you're doing right now. The Federal Trade Commission is investigating if the 10 billion dollar purchase of Subway creates a [00:01:00] sandwich shop monopoly with Jimmy's, John's and Arby's. The latter two in addition to McAllister's Deli and Schlotzky's are owned by private equity firm Rourke Capital.
Which inked a deal to buy Subway in August. Did you know, quick fact, Subway has the number one locations in the United States. I was actually, I learned that in the, uh, in this article. That's insane. They have like over 10, 000 stores. They're all over the place. And I, you look at the map, they cover the whole map in places that people don't even live.
I don't know how profitable they are. Dude, there's one between Metropolis and my dad's, a town of 300 people. There's one fast food chain between Metropolis. In Pulaski, Illinois, and it's a Subway about halfway between. Well, they're growing in popularity because people don't make sandwiches at home anymore.
I guess so. [00:02:00] Well, it's a monopoly, so what are you going to do? There's no way you can make a sandwich at home. The government is focused in part on whether the addition of Subway gives Rourke too much control of a lucrative segment of the fast food industry that people said. Making sandwiches. paid. They don't want women to lose their jobs.
We're definitely getting canceled now. Rourke paid around 10 billion for Subway. According to a third person with knowledge of the deal, the Atlanta based Rourke focuses on consumer chains with franchise models and which, uh, which also include Duncan, Buffalo, Wild Wings, and Baskin Robbins. The investigation is in the early stages and any resolution is likely months away.
Merger reviews by antitrust regulators can often take a year or more. They did this back in August and now they're deciding to investigate. And now it's going to take a long time for this to happen. If you would have asked me whether or not Subway was about to go out of business. I would have said, yeah, yeah, they're because I mean, [00:03:00] honestly, who's serious?
Send me an email. Nate at GoodMorningLiberty. us. If you're like, yeah, I gotta get some, some of that breads, you know, cause last I checked, it's mostly bread and uh, the bread's fine. That's fine. But who's stopping at a subway these days? I haven't eaten subway. Jared's in prison. You know, who's going the subway?
I still see these athletes though. They still, they're still paying athletes. Heftly. That's true. Do you see, do you see the commercials? All right. I think even Patrick Mahomey's now Subway Guy. In any merger review, regulators must first determine the market, where they believe competition is harm. The companies are arguing the FTC should widen its focus beyond sandwiches, saying consumers are choosing between a wider array of options when deciding what to eat.
And that Rourke owns only a small fraction of the total U. S. fast food market, according to two of the people. But they own all the sandwiches! Well, the sandwich shops. According to August 23 rankings. Like is a chicken sandwich a sandwich? [00:04:00] I mean, it's a sandwich. Are you saying they own like the cold meats?
I guess the cold, I don't know. I mean, I usually go to Publix to get my subs. I love the pub subs. That's another monopoly. That's why you go there. I guess. You got to choose between all the different monopolies to go eat every day. Quiznos is out of business now. Are they? I think so. Huh. Quiznos had good subs.
What about Jersey Mike's? A sub above? I'm not sure. Does Rourke own that? It's not listed. I'm sure it would have been. Subway is the largest U. S. sandwich chain based on 2022 sales with Harvey's, Jimmy John's, and McAllister's Deli also in the top seven. So Rourke's doing pretty good, overall. Yeah, also, uh, Subway, I forgot about this, but Subway is a MAGA.
Institution. Oh, is it? Yeah. I didn't know that. Based on Juicy Smooly A. I'm pretty sure that was, he went to Subway. Subway? Sandwiches?[00:05:00]
Yeah. All right. Other things the, uh, FTC is doing right now. They're hard at work. Oh man. They're always, they're always at it. It's to protect you, by the way. So Royal Caribbean owns Arby's, Jamie John's, McAlister's Deli, Schlott's Skis. We know this. Uh, this. This, this tweet from Elizabeth Warren, we don't need another private equity deal that could lead to higher food prices for consumers.
The FTC is right to investigate what are the purchase of Subway by the same firm that owns Jimmy's John's and McAllister's deli creates a sandwich shop monopoly. Have you seen the commercials where the dude, you know, what's his name from the TV show? So he's calling it Jimmy's John's. Yes. These are franchises, by the way.
So it's not, like, they own the fran They, like, they own the corporate structure. Most of these shops, Subway's, Jimmy John's, McAllister's Deli, they're individually owned and operated. Yeah. Yeah. [00:06:00] So it's like, it's, there's like a McDonald's corporation, and then there's like the McDonald's stores. So what's the Usually owned by not McDonald's.
I try to wrap my head around this idea. The idea is they're going to buy Subway. And so then Subway, Jimmy's John's and McAllister's are all going to form this cartel pricing model, uh, where they, they'll all be able to raise their prices, I guess. And the idea is, okay, now there's a sandwich monopoly. They got a sandwich monopoly, basically.
And with the three of them together kind of feels more like a cartel with one person kind of running. The, uh, the sandwich, the sandwich cartel, you know, this is dangerous people out there. Okay. You gotta pay your sandwich bill, folks. A lot of movies about this. Okay. Um, and think of the pigs that are going to be slaughtered.
The idea is for their ham, they can just raise their prices freely because when people go out to [00:07:00] eat, they don't consider. There are other options, like you see a line of restaurants, and there's a McDonald's, and a Burger King, and a, and a Bojangles, and a Chicken Filet, and Whataburger, and all these places, and then there's a Subway, Culver's, and you're like, well.
I know Subway sandwiches are around 79 these days. But I have to have a sandwich. I gotta get a free footlong if I stamp the rest of my card. You know, so I gotta go over there. Which by the way, that free sandwich now is worth a lot more, obviously. So there's all different ways that they have to compete.
Not to mention the fact that you could buy your own guldern longbread. And put your own meats on it and just eat that at home. You can make your own gold or long bread. Uh, you can make a two foot long, whatever length you want, man, it's up to you is constrained by the size of your oven and you can make that bread.
And you can [00:08:00] put your own meats on it. And that's the problem, ovens. That's, mmm, big ovens. Especially gas powered ones, yeah. Because that's bad for the environment. I see where they're going with this. This is all part of a grand master plan right now. So there's all different ways that they have to compete with people.
And of course, if they raise their prices more than what people are willing to pay, they'll just go to another fast food restaurant, or they'll make their sandwiches at home, or they'll go to a gas station, which also sells subpar sandwiches. In their little cold section or the public's which also sells sandwiches, you know There's all sorts of places for these long sandwiches.
These mysterious. I'm pretty sure important long sandwiches people have to get speedway has their own They do yeah, which is yeah Panera Panera breads. They got their own sandwiches out there, but monopoly It's a monopoly, for sure. That's what's going to happen. The other thing that they're working on right now, is they're still trying to shut down this merger between [00:09:00] Albertsons and Kroger.
Right now, because that's going to lead to... I'm so glad you said Kroger, and not Kroger's. You know? People still say that, huh? They still say Kroger's. Mostly older people, I think, will say that. It's like going to Aldi's, or Walmart's. It is just Aldi, isn't it? It is Aldi, yeah. Or Lowe's. After years of excessive inflation, the merger between these two would unlock significant benefits for consumers, more product options, lower prices, and better customer service.
Unfortunately, the FTC already appears to have made up its mind. This is about the merger between Albertsons and Kroger. They say that that's going to lead to them being able to raise their prices on the idea that they're going to band together and have this grocery store monopoly, and which means they can charge whatever they want for their groceries.
But unfortunately, they're not even the number one or two or three, uh, grocer out there. Uh, they're, I think, I think it was number four and six. [00:10:00] Kroger and Albertsons, and that's just by rank. They're not even close to the market share that number one and two and three have, they're like, these are two little stores and they're trying to band together so they don't get put out of business by Walmart.
That's Walmart's right now. Anyway, you're saying Walmart has a monopoly, but they have. They're trying to stop this monopoly from forming so that way we don't have two monopolies. Yeah, you can only, there can only be three. That's, yeah. Right now we have about six monopolies and they're worried. That's too many for mono.
Yeah, because mono means. Any amount you want it to mean. No, but not. That's right. While the landmark deal is not expected to close until early 2024, it has already been reported that the FTC is not satisfied with the proposal. Despite Kroger having agreed to divest over 400 stores in overlapping markets, they're just saying they're going to give away their stores that they've fought, that they gave their own blood for.
Uh, they're just going to give them away to try and make the FTC [00:11:00] happy. According to two sources with knowledge. Uh, the FTC will likely take Kroger and Albertsons to court. If true, the court battle will be unfortunate, but not surprising. Where are the numbers here? Uh, Khan, Lena Khan, who has not won a court case yet.
She's taken all kinds of people to court to try and block mergers, and she's lost all of them. Which is awesome. It's great. If there is a merger that is presenting a lot of risk of reducing competition, It may even create a monopoly. How would it create a monopoly? We need to weigh those risks and especially given that some of these remedies in the past have failed.
Um, let me see. You're talking about What's amazing to me though, it's like these people have nothing to do. No, it's But we created their positions and now it's like they That's what happens. You create these positions and then they got to go looking for something that's not even happening. And she just keeps using your money, by the way.
She's losing all of these court cases. She's slowing down all of these business merger deals. Not only that, she's making people scared to do any mergers because they're [00:12:00] worried they're about to spend a year in court. She probably gets bonuses just based on how many lawsuits she files. Yeah, that's it.
She's trying. It's the thought that counts. She's doing something. There's no evidence that the Kroger Albertsons merger will result in any of the supposed harms. She believes it would. For starters, Kroger Albertsons merger would not create a monopoly in the grocery market. According to a recent report by retail info, Walmart remains the nation's largest grocer controlling, I hate to even reason to use that word.
They have earned 17% of the grocery market. The second and third largest groceries are I, I went to Walmart grocery last night. Yeah, Lacey went last night. And the reason to Walmart last night or the night before, she went both nights. That's just how powerful they are putting herself in danger. Well, she went to mount juliet this time.
Oh
Yeah Well, the reason I went is because they were open till 11 And it was like 9 45 and the other places we're gonna kroger. That's a monopoly closes at 10 [00:13:00] So, uh, let's see. The second and third largest grocers are amazon and costco amazon amazon number two second Kroger and Albertsons are only a distant fourth and sixth with market shares of 4.
4 percent and 2. 2%. And so they're worried that the two of those are going to combine together, join forces to have a 6. 6 percent controlling share while, while Walmart has 17. Uh, they don't give the number for Amazon, but let's say it's. 10 or whatever. And that's because the subway owner and the Kroger owner are their buddies.
They're working together. They put subways in the Kroger's. Actually, those are in Walmart's these days. So, huh. Yeah, I don't know. If you follow it all the way through though, it's a monopoly. Oh, yeah. Yeah. Well, it definitely is a monopoly. We know that. Uh, so, in this article they talk about how grocery stores, brick and mortar grocery stores are on the decline.
And a lot of people are ordering their groceries online from [00:14:00] places like Amazon. And Walmart. Yeah. By the way. The problem is. And Costco. For places like Kroger and Albertsons. As they lose their market share and their sales go down or they don't increase at the rate that say inflation is or something like that, or that their competitors are, they have a harder time offering some of the cheaper deals that they have.
One thing that can help them is if they actually grow bigger, they combine together, there are two. Uh, pretty good bank accounts, they've got Kroger brand foods, they've got Albertson brand foods that they have cheaper deals on, so they can actually offer cheaper products across both of the stores, and they can afford to try and take on Walmart, who has three times the market share that these two combined together would.
Otherwise, what's going to happen is, somewhere like Walmart and Amazon are just going to continue. Uh, getting more and more of the market share and Kroger or Albertsons or both are just going to go out of business. And then the only options you'll have [00:15:00] are Walmart and Amazon and Costco. All the stuff that the FTC does ends up benefiting the biggest people because these are two companies that are trying to stay alive.
Right now competing against Walmart and if they aren't able to merge they might not be able to stay alive And then only Walmart will be left thus creating a mega monopoly a MAGA monopoly In fact, yes, so yeah the super store. Yes Yeah, super MAGA because Walmart they have the monopolies on those Exactly.