Whole Foods, Wild Oats Integration Challenged By FTC

PORTLAND, Ore. — The Federal Trade Commission on Monday asked a federal judge to halt the integration of Wild Oats and Whole Foods Market as part of an ongoing legal battle over the 2007 deal that combined the two natural grocery chains.

The FTC wants a U.S. District Court judge to force Whole Foods to stop any integration activities while one of multiple disputes over its acquisition of Wild Oats is handled in court.

If the judge finds the FTC has a strong enough case, the regulators say they could completely unwind the companies.

Federal regulators said in their filing that the request is "appropriate, and reasonable" to preserve the assets of Wild Oats until the conclusion of the hearings. The FTC said it would not comment further on pending litigation.

Whole Foods officials called the FTC's request "absurd" and said the process of integrating Wild Oats is done.

"They want us to put the toothpaste back in the tube," said Lanny Davis, an attorney representing Whole Foods. "How can you halt something that is already done?"

Whole Foods Market Inc. bought Wild Oats Markets Inc. of Boulder, Colo. for $565 million. The Austin, Texas-based company then spent millions more converting Wild Oats stores into Whole Foods sites and selling off others.

But the FTC's challenge, which began in 2007 before the acquisition closed, has left it in legal limbo.

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The FTC has long argued the deal would create a natural-foods monopoly.

Whole Foods argues organic and natural foods are widely available from other sources, and it has said the process for reviewing the is deal flawed and even sued the FTC for violating its rights.

The U.S. District Court is expected to decide in coming months whether public interest demand a full-scale hearing. A separate antitrust hearing is scheduled later this year.

"First, they pronounce us guilty without one day in court of evidence," Davis said. "Now, they are demanding remedy before we even go to court."

The antitrust case has posed added challenges for Whole Foods as other grocers have tried to stay out of the legal battle.

Whole Foods lawyers are seeking information that would illustrate the grocer is not a monopoly, but many grocers are resisting sharing proprietary information.

Tuesday, Whole Foods plans to urge grocers to share their business practices, adding a legal nudge and asking the court to add a layer of protection to assure them Whole Foods will not see the information.

Whole Foods chief executive officer John Mackey also sent letters Monday that assure the grocers his company won't see it.

Comments

[ErnestineBass]

The frigging FTC has to be kidding. Madness!

[curiousasheck]

Divide and Conquer

Probably planned by the anti-organic Center for Global Food Issues, a project of the right-wing Hudson Institute.

[westcoastsc]

What are you talking about?

[America1st]

How utterly ridiculous that they are going after the natural food market rather than the technology, telecommunications, and media mergers which truely have a reputation of crushing competition.

[Wide Stance]

Exactly. We can shop anywhere we choose, but how many of us have only one cable provider? Idiocy. The NFL can charge whatever they like for programming, and MLB can black out games in cities a thousand miles apart--and they are worried about the cost of organic tofu.

[westcoastsc]

This is about their merger. How can we just have one big natural food market? Competition makes prices go down.

[Wide Stance]

Anyone that has ever shopped at either Whole Foods or Wild Oats knows that that statement is patently false. Show me the lower prices. Competition among grocery chains is not bringing the price of food down anywhere in this country. These two stores are among the highest priced chains in the nation.

[dandypuddin]

Let's see, BofA acquired Merrill Lynch, Citigroup is buying out JP Morgan to make itself the biggest investment bank in the world, JP Morgan bought Washington Mutual, can't recall who bought Wachovia. And this is important????

[nomoredead]

But don't ever say anything to Rupert Murdoch.

[Fabini]

The banking system is melting - forget the whole foods thing.

[ObjectiveRealist]

FTC is cowardly, picking on a niche industry when it should be investigating the systematic corruption of the Bush/Cheney White House and its corporate sponsors.

http://www.nytimes.com/2008/07/30/business/30food.html
quote:
The ruling left unclear what would happen if the courts find against a merger that has, for all practical purposes, already occurred.
/quote

Whatever else such a ruling does, it would certainly be bad for customers.

quote:
The marriage between Whole Foods Market and Wild Oats Markets was thrown into doubt again on Tuesday, at least temporarily, by a federal appeals court, which ruled that a lower court judge had inadequately considered the impact on customers.
/quote

Wouldn't the federal appeals court's actions compromising an earlier ruling on a business transaction that is working well for everybody fit the same description, only more so? Yes.

[Bobleblah1]

Another slap in the face.

Is it a coincidence that Whole foods and Wild Oats are
two of the few places where you can buy non GMO foods.
Next thing you know, they will be going after Trader Joes and lord knows who else.
Then all you will be able to buy is processed genetically modified cancer food.

Thanks FTC for protecting us from health and nutrition.

[SimJack]

As I read into the GMO food issue more and more, I'm beginning to see the truth to this. If Cargill, ADM, Monsanto, Dow, DuPont and several other multinationals will stop at nothing until they have put their fingerprints on everything we eat.

[oakley9]

Yes, exactly. If it was defense contractor, chemical, or pharmaceutical company they would not care. They are threatened by people eating healthy and taking health into their own hands. the have been trying to shut down the industry for years, claiming to be a watchdog. What a joke.

[nomoredead]

Bingo. This is something our new administration could look into. They control these large conglomerates have over the food in foreign poor countries is frightening.

' The World Food Crisis " by John Nichols
A great article in ' The Nation ' website

[spinns17]

lol but they allow walmart to destroy many small companies .

[Kurt]

It's rather fashionably late for this, as the Wild Oats stores have ceased to exist - at least in AZ.

[research]

the FTC thought THIS was important?

Not the Finical Instruments they are supposed to regulate, that have crashed our economy?

[Knowbetter]

I used to patronize Whole Foods at their original location on Lamar Blvd.

They have become what they were originally an alternative to.

[Bitsko]

A Whole Foods moved into my neighborhood in Manhattan, and the local businesses are feeling it at the cash register.

[Citizen54]

Can that many people in your neighborhood afford to shop at WF?