PORTLAND, Oregon (AP) — Supermarket chain Albertsons told a federal judge Monday that it may have to lay off employees, close stores and even pull out of some markets if its planned merger with Kroger is not approved.

The two companies had proposed the largest supermarket merger in U.S. history in October 2022. But the Federal Trade Commission filed suit to block the $24.6 billion deal, claiming it would eliminate competition and raise grocery prices at a time when food prices are already high.

In the three-week hearing that began Monday, the FTC is seeking a temporary restraining order that would block the merger while its complaint is heard before an internal administrative law judge.

“This lawsuit is part of an effort to help Americans feed their families,” FTC Chief Counsel Susan Musser said in her opening statement Monday.

Musser said Kroger and Albertsons currently compete in 22 states and are very similar in price, quality, private-label products and services such as in-store pickup. Customers benefit from that competition, she said, and would lose those benefits if the merger is approved.

Customers are also wary of the merger, the lawyer said. In Santa Fe, New Mexico, for example, 278 customers wrote to the FTC to express their concerns about a merger between Kroger and Albertsons, which would own five of the city’s eight supermarkets.

But Kroger and Albertsons insist the FTC’s objections do not take into account increasing competition in the grocery sector. Walmart’s grocery sales last year were $247 billion, up from $63 billion in 2003. Costco’s sales rose more than 400 percent during the same period.

“Consumers are blurring the lines about where they buy groceries,” said Enu Mainigi, an attorney for Albertsons.

Mainigi said Albertsons customers currently spend 88 cents of every dollar at competitors ranging from Aldi and Trader Joe’s to Dollar General. Albertsons can’t compete with larger, national rivals, but a merger with Kroger would help it do so, she said.

Kroger lawyer Matthew Wolf also defended the planned merger.

“The savings from the merger are obvious and intuitive. Kroger may have the best price on Pepsi. Albertsons may have the best price on Coca-Cola. Together they have the best price on both,” Wolf said.

The two sides also disagree on Kroger and Albertsons’ plan to sell 579 stores in locations where their stores overlap. The buyer would be C&S Wholesale Grocers, a New Hampshire-based supplier to independent supermarkets that also owns the private labels Grand Union and Piggly Wiggly.

According to the FTC, C&S is ill-prepared to take over these stores. Laura Hall, the FTC’s lead litigator, cited internal documents showing that C&S executives were skeptical about the quality of the stores they would acquire and may have wanted to secure the option to sell or close them.

But Wolf said C&S has the experience and infrastructure to operate the divested stores and, if the merger plan goes ahead, would be the eighth-largest supermarket company in the United States.

The commission also alleges that workers’ wages and benefits would decline if Kroger and Albertsons no longer competed with each other.

Before the hearing, several members of the United Food and Commercial Workers International union gathered outside the federal courthouse in downtown Portland to speak out against the proposed deal.

“Enough is enough,” said Carol McMillian, bakery manager at a Kroger-owned grocery store in Colorado. “We can no longer stand by and tolerate corporate greed that puts profits before people. Our workers, our communities and our customers deserve better.”

The union also expressed concern that possible store closures could lead to a so-called grocery and pharmacy desert for consumers.

When a grocery store closes, for people in many communities across the U.S., “going to the nearest gas station is actually the only source of food,” says Kim Cordova, president of UFCW Local 7, which represents more than 23,000 members in Colorado and Wyoming.

Mainigi argued that the deal could actually lead to an increase in unionized jobs, since many of Kroger and Albertsons’ competitors, such as Walmart and Costco, have few unionized workers.

U.S. District Judge Adrienne Nelson is expected to hear from about 40 witnesses, including the CEOs of Kroger and Albertsons, before deciding whether to issue the preliminary injunction. If she does decide to block the merger, the FTC’s internal hearings are scheduled to begin on October 1.

But Nelson’s decision will seal the merger’s fate, Wolf said. He said the FTC’s internal administrative process is so lengthy and cumbersome that merger deals almost always fall apart before they’re finalized. Earlier this month, Kroger sued the FTC, arguing that the agency’s internal procedures are unconstitutional and that it wants the merger’s merits to be decided in federal court.

The attorneys general of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming joined the FTC in the lawsuit. Washington and Colorado filed separate lawsuits in state court to block the merger.

Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands such as Ralphs, Smith’s and Harris Teeter. Albertsons, based in Boise, Idaho, operates 2,273 stores in 34 states, including brands such as Safeway, Jewel Osco and Shaw’s. Together, the companies employ about 710,000 people.