Almost 60 years ago the US Department of Justice argued before the Supreme Court that a couple of large grocery store chains in Los Angeles should not be allowed to merge. The government believed two things were at stake: the livelihood of ordinary Americans and the chance to set a legal precedent to pre-empt market saturation.
The 1966 case was not about proving existing concentration. It was about showing that the industry was beginning to “turn the corner to oligopoly”. The tie-up between Von’s Grocery Company and Shopping Bag Food Stores would have dealt the final blow, authorities argued.
“You can’t force the government to wait in intervening in a merger movement until the market has ceased to be competitive,” said the DoJ, which ultimately won the case.