retail news in context, analysis with attitude

The Wall Street Journal reports that US District Court Judge Paul Friedman has scheduled a two-day hearing for February 17-18 that will evaluate the continuing efforts by the Federal Trade Commission (FTC) to unravel the $565 million acquisition of Wild Oats by Whole Foods, an acquisition that was closed more than a year ago.

The FTC maintains that the deal is anti-competitive and will result in less choice and higher prices for consumers, but Whole Foods argues that this position betrays a lack of understanding of the marketplace.

According to the story, “The FTC plans to hold a full administrative trial on the legality of the Whole Foods-Wild Oats merger in April.

“The commission told Friedman Thursday that Wild Oats needs to be preserved as a separate brand to ensure interim competition in the market for organic foods until all legal proceedings have run their course.

“Whole Foods argued in response that the FTC's proposal is extremely burdensome and impractical because integration of the two companies is mostly complete.”

KC's View:
My position has been clear on this story – the FTC is deluded and wasting taxpayer money, and the facts would indicate that there is plenty of competition in the natural and organic marketplace.

But I got an email yesterday from someone who did not want to be quoted, but who suggested that I could be completely misguided in my objections to the FTC actions, and that there could be plenty of reasons that it wants the deal undone.

I cheerfully admit that I could be wrong about this, just as I could be wrong about pretty much anything. But if the FTC had legitimate and convincing cards to play, you'd think that it would have played them by this point. Which best I can tell, it hasn’t.

The problem is that even if Friedman rules against the FTC, the agency will continue to press the case administratively. Which means that this story isn’t even close to being over.

This may be good for people like me, who rant for a living. But I can’t see how it is good for anyone else.