retail news in context, analysis with attitude

Whole Foods yesterday said that is has refilled its case against the US Federal Trade Commission (FTC) in the US Court of Appeals, saying that it wanted to go directly to federal court in order to get a faster decision.

The case charges that the FTC has violated Whole Foods’ right to due process and equal protection by going ahead with an administrative trial into Whole Foods’ $565 million acquisition of Wild Oats, which closed more than a year ago.

“Whole Foods Market is interested in getting to the merits of this case as quickly as possible rather than spending everyone's valuable time and resources arguing about jurisdiction," said Jim Sud, executive vice president of growth and business development for Whole Foods Market. "Filing with the Court of Appeals, which the FTC concedes has jurisdiction over the case, saves time and we want to move this case forward in the most expeditious manner for all concerned."

The FTC is arguing that the acquisition was anti-competitive and would result is less choice and higher prices for consumers, and it is seeking redress both in the courts and through its own administrative hearing; it actually is looking to unravel the merger, and is asking that Whole Foods rebrand all the Wild Oats stores that it has changed to its own banner, and that a trustee be named to run those stores as a separate company.

The Whole Foods argument, essentially, is that the FTC doesn’t understand the mechanics of the marketplace.

KC's View:
It probably wouldn’t be a legitimate legal argument that the FTC seems to have its head up…well, maybe we shouldn't go there.

If next Tuesday’s inauguration leads to a change in leadership at the FTC – which I assume it will – then it cannot come soon enough.