Good to see the Feds finally cracking some greedhead skulls by sacking up and opposing an anti-consumer megamerger. Ummm, wait a sec…
FTC wants to stop Wild Oats/Whole Foods deal
New Mexico Business Weekly
2:47 PM MDT Tuesday, June 5, 2007
The Federal Trade Commission says it will sue to stop a pending merger between rival natural foods grocers Wild Oats Markets Inc. and Whole Foods Market Inc.
Boulder, Colo.-based Wild Oats (NASDAQ: OATS) has agreed to be acquired by Austin, Texas-based Whole Foods (NASDAQ: WFMI). The deal was announced in February. Wild Oats said Tuesday it was informed the FTC will file a federal lawsuit to block the acquisition. (Story.)
You simply must be kidding me, right?
I have no idea what kind of rationale the FTC thinks it has, but it’s hard to imagine how they reached this decision without doing a serious Abu Ghraib on the facts.
- For starters, there are precious few places in the US where these two companies are slugging it out head to head. I live in one of those places now and I moved here from a town where Whole Foods was the only organic-only option. There is no meaningful difference in price or service between the two situations. However, a merger of the two might enable some economy of scale on the buying front, which would be pro-consumer.
- Second, in case nobody at the FTC does their own shopping, it needs to be pointed out that feckin’ everybody out there is jumping into the organic market. Kroger, Harris Teeter, Lowe’s, Safeway – all of them are ramping up to address the competitive threat posed by organic grocers. So, hypothetically speaking, which is the greater threat to competition and the consumer – a merged Whole Foods/Wild Oats or a MegaGroceryCorp with the financial resources to overwhelm smaller operations? Who is served by a government agency’s decision to tie the hands of the little guy? It’s like watching one of those pro wrestling angles where the heel has paid off the referee.
- Ummm, isn’t Wal*Mart getting into the grocery biz? Yeah, that’s good for the consumer. I missed the FTC action on that – anybody have a link for me? Anybody?
- As the Motley Fool notes, if the FTC is so darned worried about the two biggest competitors in a sector merging, why haven’t we heard from them on XM/Sirius?
Frankly, I’m just livid over this. It’s not so much the question of the merger itself as it is the hypocrisy and the overpowering stench of of big money influence wafting from the direction of the FTC’s offices. This suit is bad for consumers and bad for a couple of comparatively small companies that provide a tremendous service in the communities where they operate. Who is it good for? Big corporate grocers and Wal*Mart, who have a lot of lobbyist cash to fling around. I can’t prove that the FTC is bought on this one, but you can’t blame me for being suspicious, can you?
Here’s hoping that when this crap gets to court the judge lobs it out about three seconds into opening arguments and then has some FTC lawyers shackled and jailed for contempt for wasting public money on such a transparent and frivolous assault on the public interest.
Categories: American Culture