FTC not Wild about Whole merger thing

Ashley Milne-Tyte Jun 6, 2007

SCOTT JAGOW: The grocery chain Whole Foods wants to buy its rival Wild Oats. But the Federal Trade Commission thinks something unwholesome might be going on here — the FTC is set to file a lawsuit today to block the sale. Ashley Milne-Tyte reports.

ASHLEY MILNE-TYTE: Whole Foods and Wild Oats say they’ll challenge the FTC’s decision. Richard Donovan co-heads the anti-trust practice at New York law firm Kelley, Drye and Warren. He says the FTC will argue that natural and organic foods constitute a unique niche — one that would be monopolized by the merger.

RICHARD DONOVAN: Or the parties Whole Foods and Wild Oats… Will they win, and convince the judge that “no, we compete with all of the other major supermarket chains that have been adding more and more organic and natural foods to their offerings”?

He says economists will provide key evidence — they’ll examine cases where Wild Oats and Whole Foods each have a store in the same neighborhood — and whether sharing turf maintains healthy competition.

If it does, Donovan says, the court is likely to want to keep that balance by saying “no” to the merger.

In New York, I’m Ashley Milne-Tyte for Marketplace.

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