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CEO puts Web’d foot in mouth

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Scott Jagow: The organic grocery chain Whole Foods is trying to buy its rival Wild Oats. The Federal Trade Commission wants to block the sale. It filed a lawsuit claiming the deal would kill competition and jack up prices. Ho-hum, another antitrust story. Nuh-huh. The FTC just revealed that the Whole Foods CEO has been doing something rather unusual. Our man in London Stephen Beard joins us for this one. Stephen, what did he do?

Stephen Beard: It turns out that the Whole Foods boss John Mackey had been attacking Wild Oats on an Internet investors forum for years. He was, under the alias “rahodeb,” generally attacking and running down Wild Oats.

Jagow: Online, anonymously. . .

Beard: Indeed. Well not anonymously, under an alias, rahodeb.

Jagow: Right, so what was he saying?

Beard: Well, he was saying things like the management of Wild Oats doesn’t know what it’s doing, the company’s got no value, no future, it’s gonna go bankrupt. And referring to his own company, While Foods, he was saying things like surely Whole Foods wouldn’t buy Wild Oats, certainly not at current prices.

Jagow: What is the company saying about this, or Mackey saying about this?

Beard: In a wonderfully straight-faced statement, a Whole Foods spokesman acknowledged that Mackey had made these postings under an alias “to avoid having his comments associated with the company and to avoid others placing too much emphasis on his remarks.”

Jagow: How much damage might this do to Whole Foods’ attempt to buy Wild Oats and to expand over there in Europe?

Beard: Well as far as the Internet postings are concerned perhaps it will do very little damage. It’s quite clear that in some of these postings Mackey is having fun. He uses his alias in one posting to defend his own haircut when someone on the site criticized it, rahodeb wrote “I like it. He looks cute.” But there are other things emerging which do look a bit more damaging — the claim that Mackey had spoken to colleagues about Wild Oats being the only competitive threat, and the need to eliminate that competitive threat. Now that in an antitrust case does look a lot more damaging.

Jagow: I would say so. Thanks Stephen.

Beard: OK.

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