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A top Kroger executive testified that the grocery chain hiked up the prices of milk and eggs beyond the added costs from inflation, according to a new report.
The remarks were made during a court hearing over antitrust regulators' attempt to block the supermarket giant's merger with grocery chain Albertsons.
While testifying in Oregon federal court on Wednesday, Kroger's senior director for pricing, Andy Groff, was questioned by a Federal Trade Commission attorney regarding an internal email he sent to other Kroger executives earlier this year about the prices of the staple household items.
"On milk and eggs, retail inflation has been significantly higher than cost inflation," Groff wrote in the March email, Bloomberg reported.
In response to questions about the email, Groff testified that Kroger's objective is to "pass through our inflation to consumers," according to the news outlet.
A Kroger spokesperson downplayed the remarks, saying in a statement to Business Insider: "This cherry-picked email covers a specific period and does not reflect Kroger's decades-long business model to lower prices for customers by reducing its margins."
The discussion around grocery costs came to light amid growing national attention on inflation and price gouging.
Vice President Kamala Harris, the 2024 Democratic presidential nominee, recently unveiled her plan to crack down on grocery inflation, which includes a first-ever federal ban on excessive overpricing of food and groceries.
Harris' plan has sparked mixed reactions from experts and economists, with some criticizing it as unnecessary government intervention into an issue they argue is not at the core of the inflation problem that has impacted Americans in recent years.
Meanwhile, Kroger and Albertsons are continuing to duke it out in court against federal regulators who are trying to block the companies' proposed $24.6 billion merger — the largest in United States history.
The supermarket chains argue that Kroger's acquisition of Albertsons would boost competition with retail rivals like Walmart, Costco, and Amazon, while the FTC alleges the opposite, saying the deal is actually anticompetitive and would result in higher grocery prices for millions of Americans, as well as lower wages for workers.
Both sides are currently making their case before US District Judge Adrienne Nelson, who will ultimately decide at the end of the hearing next month whether to approve the FTC's request for a preliminary injunction against the merger.
If the judge rules in favor of the FTC, the deal between Kroger and Albertsons could end up torpedoed completely.
