By Deborah Bloom and Jody Godoy

PORTLAND, Oregon (Reuters) – Kroger CEO Rodney McMullen attributed rising grocery prices to increasing costs for retailers as he defended the grocery chain’s proposed $25 billion merger with rival Albertsons at a trial on Wednesday.

In testimony a trial in Portland, Oregon, McMullen cited rising supplier costs, fuel prices and credit card swipe fees when asked by the company’s lawyer why prices have risen.

The U.S. Federal Trade Commission and several states sued in federal court to block the merger, and are seeking to show the deal would lead to higher prices and reduce the bargaining leverage of unionized store workers by ending the fierce rivalry between Kroger and Albertsons.

Soaring food prices, which have become a hot button political issue in the U.S. presidential race, have risen 25% between 2019 and 2023, faster than other consumer goods and services, U.S. Department of Agriculture statistics showed.

“Absolutely not,” McMullen replied when asked if Kroger would raise its prices after the merger. “We believe over time, value will be increasingly important and you can’t price your items above the market.”

Kroger has argued it needs the increase in scale from the merger to compete with Walmart, the largest U.S. retailer, while Albertsons has said if the deal falls through, it may have to consider layoffs and store closures.

(Reporting by Deborah Bloom in Portland; Writing by Jody Godoy in New York; Editing by Richard Chang)