Closing arguments have commenced in the high-stakes battle between the Federal Trade Commission (FTC) and the supermarket chains Kroger and Albertsons over their proposed merger. The FTC, arguing in a U.S. District Court in Portland, Oregon, presented its case on Tuesday, urging the court to issue a preliminary injunction blocking the $24.6 billion deal. According to the FTC, the merger would likely benefit shareholders, but everyday shoppers could face higher food prices and decreased competition.

Over the course of a three-week hearing, the FTC's legal team submitted its closing arguments, pushing for Judge Adrienne Nelson to halt the deal temporarily while the FTC's complaint is presented before an in-house administrative law judge. Kroger and Albertsons, in their defense, assert that the merger would enable them to better compete against retail giants like Walmart and Amazon, leading to lower prices for customers.

However, the FTC argues that the merging supermarket chains primarily compete with each other, rather than with online retailers or wholesale warehouse stores like Amazon or Costco. Susan Musser, the chief trial counsel for the FTC, emphasized in her closing statement that the merger would eliminate local competition in communities across the country.

Moreover, the FTC contends that the merger would result in decreased competition and subsequently lead to higher food prices for struggling customers. Currently competing in 22 states, Kroger and Albertsons offer similar prices, quality products, and services like store pickup. The FTC emphasized that such competition is beneficial to shoppers and would be lost if the merger is allowed to proceed.

The issue of workers' wages and benefits also emerged as a concern during the hearing. Both the FTC and labor union leaders expressed worries that employees would experience a decline in compensation if Kroger and Albertsons ceased competing with each other. Additionally, potential store closures resulting from the merger could create what is referred to as "food and pharmacy deserts" where consumers lack access to essential stores.

To circumvent antitrust concerns, Kroger and Albertsons proposed selling 579 stores where their locations overlap to C&S Wholesale Grocers. However, the FTC argues that C&S is unprepared to handle those stores, citing internal documents suggesting doubts from C&S executives about the store quality. C&S CEO Eric Winn, however, testified that he believes his company can successfully manage the venture.

The FTC's lawsuit has garnered support from multiple state attorneys general, including those from Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming. Additional actions have been taken by the states of Washington and Colorado, which have filed separate cases seeking to block the merger.

If the injunction is granted by Judge Nelson, the FTC plans to proceed with in-house hearings starting from October 1st. However, Kroger has filed a lawsuit against the FTC, claiming that the agency's internal proceedings are unconstitutional and requesting that the merits of the merger be decided in federal court. The lawsuit was filed in federal court in Ohio.

Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including popular brands like Ralphs, Smith's, and Harris Teeter. Meanwhile, Albertsons, headquartered in Boise, Idaho, has a presence in 34 states with 2,273 stores, including well-known names like Safeway, Jewel Osco, and Shaw's. Together, the two companies employ approximately 710,000 people. The decision regarding the merger now lies in the hands of Judge Adrienne Nelson, whose ruling will determine the future of this potentially groundbreaking deal.