Whole Foods Unable to Sow Wild Oats?

Scott Reeves  Jan 13, 2009 11:00 am

Whole Foods Unable to Sow Wild Oats?
 
FTC may block takeover.
 

 
Many shoppers head to Whole Foods (WFMI) to improve their diets, but lawyers for the Federal Trade Commission hope to get fat.

The FTC wants a federal judge in Portland, Oregon to halt the integration of Whole Foods and Wild Oats amid anti-trust concerns. A 2007 merger combined the natural-food grocery chains.

Whole Foods says the FTC’s action is “absurd,” because integrating the operations is already complete.

“They want us to put the toothpaste back in the tube,” Lanny Davis, an attorney for Whole Foods, told the Associated Press. “How can you halt something that is already done?”

The FTC says the merger would create a monopoly in the natural-foods market. That’s a little hard to swallow, given the number of weekend farmer’s markets in many cities. And major retailers -- including Wal-Mart (WMT) -- offer a variety of organic food. So the simple student (and concerned taxpayer) might ask: What’s the Federal Trade Commission talking about?

On the other hand, CEO John Mackey himself was quoted as saying that “[Wild Oats] is the only existing company that [could] get into this [the natural-grocery] space. Eliminating them means eliminating this threat forever, or almost forever, [and eliminating] the competition.”  Eliminating the competition is, of course, the definition of a monopoly.

The US District Court could demand a full-scale hearing. Whole Foods is also facing a massive lawsuit in California for violations of Proposition 65, which require maufacturers to alert consumers to the presence of carcinogens.

Here’s a thought: Shovel some of those Federal bailout bucks to the FTC. That would keep their lawyers in bon-bons - and leave Whole Foods free to run its business.

That may smack of extortion, but think of it as a variation on Al Capone’s trusted theme.
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