Grocery giants Albertsons and Kroger asked a California federal judge to protect sensitive expert testimony that helped the Federal Trade Commission torpedo their planned merger in 2024, which a new FTC target said is urgently needed to show that the regulator is creating contradictory market analyses.

The two grocers made the request Thursday as nonparties in the FTC's active Robinson-Patman Act case alleging that mega-wholesaler Southern Glazer's Wine and Spirits LLC price-discriminated between its large-chain retailer customers and its independent customers.

Albertsons and Kroger's merger was blocked in 2024 by two judges, one who agreed with the FTC that it would stifle competition. Southern Glazer then sought access to expert witness Nicholas Hill's work from the merger case: 550 pages of his expert report, deposition testimony and demonstrative trial slides.

Southern Glazer claims that Hill's documents will show that the regulator is planning to contradict its own market analysis in a trial set for October 2027. The FTC has said the Southern Glazer's case being challenged under a different law from the Albertsons-Kroger case — the Robinson-Patman Act of 1936 as opposed to the Clayton Antitrust Act of 1914 — and requires an entirely different competition analysis.

The two grocers now want a California federal judge to stop Southern Glazer from getting its hands on the Hill materials.

Albertsons said Thursday that allowing the handover of the Hill materials to Southern Glazer would "reveal Albertsons' highly confidential and commercially sensitive information," and the information is "not relevant to the issues in this litigation."

"Southern has not demonstrated that any marginal relevance of these materials outweighs their highly confidential nature," it also said, and preparing the documents for handover would be burdensome.

Kroger, for its part, argued that Southern Glazer "cannot demonstrate its substantial need for the materials … by suggesting it may simply import an expert's factual analyses or conclusions to an unrelated case."

Kroger said it met Wednesday with Southern Glazer and the FTC but was unable to get on the same page with the former.

Kroger also said Southern Glazer appears to be ultimately seeking documents far beyond the Hill materials and has requested "'the FTC's expert reports and deposition transcripts, discovery responses, pleadings and attached exhibit, and trial presentations and demonstratives' and, ultimately, 'all materials provided by the parties and third parties in the Kroger/Albertsons litigation.'"

Southern Glazer wholesales one-third of all wine and spirits in the U.S., and the FTC says it routinely charges independent retailers up to 67% more than it does big-box stores like Costco and Walmart and national supermarkets.

Thursday's filings follow a formal notice the FTC sent to the two grocers on Jan. 15 that documents might be handed over. Hill is a former U.S. Department of Justice antitrust economist now in private consulting.

Just days ago, Southern Glazer asked a judge in the Central District of California to order the handover, saying the materials are critical to undermine the FTC's market theories in the complaint against Southern Glazer, a rare Robinson-Patman case.

Southern Glazer said the FTC has paired wildly different "direct corollaries," or putative competitors — for example, Publix and a nightclub — whereas in Kroger's torpedoed effort to buy Albertsons for $24.6 billion, the regulator said that only traditional supermarkets were competitors in that market and premium supermarkets like Whole Foods were not.

A Robinson-Patman case is made by showing discrimination in "paired transactions" between companies competing directly for the same customers. The FTC has presented more than 17 million such claimed pairings.

"The FTC's spreadsheets claim that … Binny's (a chain liquor store) competes with Bed Bath & Beyond, a nightclub competes with a Publix, and Costco competes with multiple different hotels," the distributor has said. "They provide very different consumer experiences, offer different products or services, and meet different consumer needs." But before, the FTC argued that Kroger and Albertsons operated in unique "channels" separating them from health-leaning stores like Whole Foods and Sprouts Farmers Market and membership big-box stores like Costco and Sam's Club, Southern Glazer said.

The FTC has said Southern Glazer is misguidedly comparing a Clayton Act merger case — one that also included labor market claims — and a Robinson-Patman case. The two are weighed under different standards and exhibit different fact patterns, it said.

The agency said a Robinson-Patman case calls for competitors with geographic proximity, goods of the same grade and quality and operations at roughly the same level on the supply chain. The case turned on whether the combined megamarket would be able to raise prices without driving away so many customers that it would lose money, the FTC said recently.

"This inquiry simply has no bearing on a secondary-line price discrimination claim under the RPA. Indeed, unlike merger cases, RPA plaintiffs need not plead or prove a defined relevant product or geographic market," the FTC said.

Representatives for the plaintiffs and defendants were not immediately available for comment Friday.

The FTC is represented in-house by Christina Brown, Dana Abrahamsen, Daniel Blauser, Kathleen Clair, Joseph Conrad, Stephanie Funk, Geoffrey Green, Jordan Klimek, Patricia McDermott, Karen Mills, Ross Steinberg and John Jacobs.

Southern Glazer's Wine and Spirits LLC is represented by Tammy Tsoumas, Craig Primis, Matthew Owen, T.J. McCarrick, Ross Powell and Daniel Zach of Kirkland & Ellis LLP.

Albertsons is represented by Jeremy Ostrander of White & Case LLP.

Kroger is represented by Daniel B. Asimow and Sonia Pfaffenroth of Arnold & Porter Kaye Scholer LLP.

The case is Federal Trade Commission v. Southern Glazer's Wine and Spirits LLC, case number 8:24-cv-02684, in the U.S. District Court for the Central District of California.