FTC Suit Quotes Whole Foods' Mackey Calling Merger an Anti-price War Tactic
WASHINGTON - The Federal Trade Commission's lawsuit to block the merger deal between Whole Foods Market and Wild Oats Market hass the former's c.e.o. John Mackey telling his board that such a merger would kill the possibility of "nasty price wars" between the combined company and mainstream rivals, and "eliminate forever" the chance of a conventional chain starting its own super natural operation.
Whole Foods, the biggest natural-foods chain, also intends to close numerous Wild Oats stores and sell several if the $565 million deal goes forward, the FTC said in the lawsuit. A copy of the lawsuit was posted on the Web site of the Wall Street Journal yesterday.
The FTC said in the suit that Mackey told his board that Wild Oats "may not be able to defeat us, but they can still hurt us," as it is the only chain still standing "that has the brand and number of stores to be a meaningful springboard for another player to get into this space. Eliminating them means eliminating this threat forever, or almost forever."
Over the years, Whole Foods made a practice of buying up most if its other supernatural rivals of any significance, leaving essentially only Wild Oats in the competitive realm.
The FTC filed the lawsuit June 6 in U.S. District Court in Washington. The information had been redacted initially because of concerns that it contained proprietary material.
The agency has said merging Whole Foods and Wild Oats would reduce competition and raise prices, arguing that the super-natural market is distinct from the conventional supermarket industry.
Also yesterday, Mackey did some posting of his own, with a new blog entry on the Whole Foods Website addressing the proposed merger and lawsuit.
"My blog posting provides a detailed look into Whole Foods Market's decision-making process regarding the merger, as well as our company's experience interacting with the FTC staff assigned to this merger," said Mackey in a statement. "I provide explanations of how I think the FTC, to date, has neglected to do its homework appropriately, especially given the statements made regarding prices, quality, and service levels in its complaint. I also provide a glimpse into the bullying tactics used against Whole Foods Market by this taxpayer-funded agency.
"Finally, I provide answers in my FAQ section to many of the questions that various Team Members have fielded from both the media and company stakeholders," said Mackey. "As previously announced, we set an intention as a company to be as transparent as possible throughout this legal process, and this blog entry is my first detailed effort at transparency."
Whole Foods, the biggest natural-foods chain, also intends to close numerous Wild Oats stores and sell several if the $565 million deal goes forward, the FTC said in the lawsuit. A copy of the lawsuit was posted on the Web site of the Wall Street Journal yesterday.
The FTC said in the suit that Mackey told his board that Wild Oats "may not be able to defeat us, but they can still hurt us," as it is the only chain still standing "that has the brand and number of stores to be a meaningful springboard for another player to get into this space. Eliminating them means eliminating this threat forever, or almost forever."
Over the years, Whole Foods made a practice of buying up most if its other supernatural rivals of any significance, leaving essentially only Wild Oats in the competitive realm.
The FTC filed the lawsuit June 6 in U.S. District Court in Washington. The information had been redacted initially because of concerns that it contained proprietary material.
The agency has said merging Whole Foods and Wild Oats would reduce competition and raise prices, arguing that the super-natural market is distinct from the conventional supermarket industry.
Also yesterday, Mackey did some posting of his own, with a new blog entry on the Whole Foods Website addressing the proposed merger and lawsuit.
"My blog posting provides a detailed look into Whole Foods Market's decision-making process regarding the merger, as well as our company's experience interacting with the FTC staff assigned to this merger," said Mackey in a statement. "I provide explanations of how I think the FTC, to date, has neglected to do its homework appropriately, especially given the statements made regarding prices, quality, and service levels in its complaint. I also provide a glimpse into the bullying tactics used against Whole Foods Market by this taxpayer-funded agency.
"Finally, I provide answers in my FAQ section to many of the questions that various Team Members have fielded from both the media and company stakeholders," said Mackey. "As previously announced, we set an intention as a company to be as transparent as possible throughout this legal process, and this blog entry is my first detailed effort at transparency."