Saturday, June 09, 2007

Wild Oats and Whole Foods Thwarted

This is why baseball needs it's anti-trust status. Things get so narrowly defined that it's insane. I wonder if Wal-Mart's behind some of the political pressure to nit pick this deal to deal. Or maybe it's the citizens of Boulder wanting to keep their mega-posh-food store "local"?

http://www.reason.com/blog/show/120623.html

The Federal Trade Commission wants to block the merger of Wild Oats Markets with Whole Foods, predicting that it would lead to "higher prices, reduced quality and fewer choices for consumers." Never mind that three-quarters of natural and organic products are sold by conventional supermarkets and other mass-market outlets. For purposes of assessing the merger, the FTC has decided to ignore all those competitors, focusing just on stores that not only sell natural and organic foods but do so in an environment similar to what shoppers experience at Wild Oats and Whole Foods:

"Premium natural and organic supermarkets seek a different customer than do traditional grocery stores," the F.T.C. said. "Whole Foods' and Wild Oats' customers are buying something more than just the food product—they are seeking a shopping 'experience,' where environment can matter as much as price."

Market definitions this narrow, designed to exclude just about every company except those involved in the deal, make it possible to reject any merger as anticompetitive.

No comments: