FTC Merger Block of Whole Foods and Wild Oats - Bam!
Whole Foods Market, national purveyors of organic and natural grocery goods, is in the process of acquiring Wild Oats, another national and natural grocer. The over half a billion dollar deal was moving along as planned until the Federal Trade Commission threw a wrench in the works. Citing antitrust law infringement, the FTC has filed a complaint against the proposed merger on the grounds that such a union would eliminate substantial competition in the premium natural and organic marketplace.
I never thought that I would so emphatically object to the FTC taking issue with the further consolidation of big business; large corporations often have the majority market share over the smaller players and I like to see these businesses have a chance too - this is America after all. However, this complaint is incredibly unjust. The FTC is limiting the natural and organic marketplace by failing to acknowledge the substantial competition that Whole Foods and Wild Oats face from the mainstream grocery market, which continues to add organic lines to their offerings. The complaint not only ignores and skews this real competition, but it also comes before many more pressing antitrust infringement priorities that exist in this country. Have they ever heard of Wal-Mart? Economists and business analysts are left dumbfounded: why is the FTC wasting its time with this?
I am not prone to conspiracy theorizing. With the attention that this government agency is giving to hindering these thriving businesses and the people's tax dollars that it is taking to do so, I am outraged with the obvious bias that is underway here. There are associations for every industry in the country and I am sure that there is one for the mainstream grocers out there that has a fulltime staff of lobbyists political pushers working to ensure that this progressive and successful competitor, Whole Foods, is thrown every barrier possible to entry in the larger grocer marketplace.
My ire stems less from my love of big business (I work at GladRags after all) and more from a desire to see people play fair. The FTC has set the rules and they should follow them. They are being preferential and discriminatory and their boldness is shameless.
For some wonderfully elucidating articles, check out the links below.
- Diana
http://www.fool.com/investing/general/2007/06/06/is-whole-foods-building-an-evil-empire.aspx
http://retail.seekingalpha.com/article/37547?source=feed
http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20070605-000643-1522
http://www.ftc.gov/opa/2007/06/wholefoods.shtm
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June 8th, 2007 at 10:55 am
I am a Wild Oats employee, and while our customers cheer that the FTC has saved us from being swallowed by “Whole Paycheck”, we let out a deep sign and cross our fingers for good luck. This merger means higher pay, a better benefits package, and job security–as Wild Oats is $106 million in the hole. If this merger is blocked, I predict Wild Oats will not survive.
June 9th, 2007 at 8:22 am
Jess, this is an issue that is making strange bedfellows. Personally I hate all the mergers that are going in the world and in the natural products industry. I remember the dismay I felt years ago when my local chain, Nature's, was purchased by GNC and then by Wild Oats. And now Wild Oats becomes Whole Foods. Where will it all end - WalMart being our only shopping choice no doubt. But the issue for me in this case is why does the FTC care? The current admin only cares when something effects big biz. We saw that when the goverment stepped in a few years back to try to loosen the Organic Standards that the natural products industry and consumers wanted in place. You have to wonder when this right wing admin we have steps into "protect consumers" - the same administration that protects us by gutting clean water and air laws. I doubt that "protecting consumers" is really what this is about. -Brenda