Kroger and Albertsons are set to showcase their defense against the U.S. government’s opposition to their planned merger in a federal court hearing commencing Monday in Oregon. The proposed merger, announced in October 2022, would mark the largest in U.S. supermarket history. The companies argue that consolidating would help cut costs and enhance their competitiveness against major rivals such as Walmart and Costco.

However, the Federal Trade Commission (FTC) filed a lawsuit to impede the merger, citing concerns that it would stifle competition and drive up grocery prices amid already soaring food cost inflation. The FTC further contended that the merger could lead to a decline in quality as well as reductions in workers’ wages and benefits due to reduced competition between Kroger and Albertsons.

The FTC is seeking a preliminary injunction to halt the merger while its case is assessed by an administrative law judge. Over the course of a three-week hearing beginning Monday, U.S. District Judge Adrienne Nelson is expected to hear testimony from approximately 40 witnesses, including the CEOs of Kroger and Albertsons, before making a decision on the injunction.

The Attorney Generals of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming have all allied with the FTC’s stance on the case. Kroger, headquartered in Cincinnati, Ohio, operates 2,800 stores across 35 states, including familiar brands such as Ralphs, Smith’s, and Harris Teeter. Albertsons, based in Boise, Idaho, oversees 2,273 stores in 34 states, including Safeway, Jewel Osco, and Shaw’s, collectively employing approximately 710,000 individuals.