In re: Whole Foods & Wild Oats merger attacked by FTC

Antitrust law has many goals, but mainly to ensure competition by preventing unfair monopolization as well as other uncompetitive practices such as collusion among business and price fixing.  Under the federal antitrust laws mergers get scrutinized to see if too much of a particular market is going away, but as part of this analysis is determining what exactly the market is.  In the case of Whole Foods the Federal Trade Commission (FTC) is apparently classifying a sub-market of organic grocery stores and thus claims they will be purchasing too much market share resulting in uncompetitive effects.

The only problem is they have gone off the deep end declaring Whole Foods occupies some special organic market because believe it or not, pretty much every supermarket today, even Wal Mart is stocking pretty substantial organic sections, as well as the growth of farmers markets in cities as people come around to the idea of buying local.  Aside from that if prices at a Whole Foods go up to high, people will lose their allegence to organic and possibly return to purchasing Kraft cheese in a can instead of local, raw milk cheese?

To couple with all of this is the simple fact the FTC and DOJ charged with the federal patrol of Antitrust violations have not attack many mergers recently – so of course this means only one thing, conspiracy?  Well maybe not, but there is an article on Slate that alleges almost as much.  See “Bush’s War on Whole Foods”  Also see from New West “FTC out on a limb: Whole Foods + Wild Oats = Monopoly?”  It will be interesting to see how this turns out as Whole Foods is going to be challenging this and they have a very good shot to win I believe, Wild Oats will be cooperating with Whole Foods in fighting the FTC in court.

“There’s one final canard in the FTC’s argument. The agency argues that if a merger were to go through, Whole Foods would be able to raise prices. But even with Wild Oats—and a gazillion other competitors—in the marketplace, Whole Foods has managed to do a pretty good job of doing that.” From Bush’s War on Whole Foods

  

“Just whom is the government “protecting” here? Prius-driving, Birkenstock-wearing Streisand fans?

These people want to be overcharged. They couldn’t care less what it costs. It’s part of what they’re buying: exclusivity without the guilt. And if it makes them feel good to pay $5 for a head of lettuce, think how much better they’ll feel once the merger goes through and they have to pay $7. ” (Commentary from MarketWatch)

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One Response

  1. Please do not allow Whole Foods to swallow Henry’s market! Whole Foods is very expensive. Henry’s is much less expensive, plus it carries some foods, such as raw poeanut butter, which one cannot find anywhere else. PLEASE do not allow such an injustice to happen!

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