Kroger has reached a $1.2 billion national settlement for communities affected by its opioid sales, with an additional $36 million for Native American tribes.
The company’s public shares dropped on Friday after the grocery store giant's second-quarter earnings report. The agreement will result in a $1.4 billion charge to its second-quarter earnings, a tally that equates to around $1.54 per share. Similar economic consequences have affected various pharmaceutical retailers, such as Walgreens, Walmart, CVS, and Rite Aid.
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Opioid settlements have circulated throughout the country. Rite Aid was sued by the Department of Justice because it “illegally filled hundreds of thousands of prescriptions for controlled substances.” The department accused additional pharmacies and corporations, including Walgreens, Walmart, and CVS, of “fueling the opioid epidemic in the United States."
Due to the far-reaching effects of the opioid epidemic, which “shatters communities across the country,” the DOJ is demanding accountability.
This national settlement is not the first time Kroger has faced an opioid-related lawsuit. In 2022, Kroger was sued by Washington state for failing to “prevent the overuse” of opioid prescriptions.
Despite reaching a settlement on Friday, Kroger stated, “This settlement is not an admission of wrongdoing or liability by Kroger and Kroger will continue to vigorously defend against any other claims and lawsuits relating to opioids that the final agreement does not resolve.”
With more than 2,000 locations, Kroger is the third largest retail company operating grocery and retail stores under well-known banners such as Ralphs, Dillons, Smith’s Food and Drug, King Soopers, Fry’s Food Stores, QFC, City Market, Owen’s, Pay Less, Pick ‘n Save, Fred Meyer, and Food 4 Less.
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Qualifying states, subdivisions, and Native American tribes can participate in the settlement, and Kroger will have full discretion to determine whether there is enough participation for the settlement to become effective. If all conditions are met, “the settlement would allow for the full resolution of all claims on behalf of participating states, subdivisions, and tribes.”
The deal is anticipated to close in early 2024.