Whole Foods Might Have to Dismantle Its Wild Oats Acquisition

Beware the insurmountable barriers to entry which the retailing of organic tomatoes bestows on its business owner. We mentioned this situation whereby the Whole Foods/Wild Oats completed M&A was under fire since the "deal would harm consumers who shop at "premium natural and organic supermarkets."", treating this business as if it were impenetrably walled off from the rest of the economy. 

Anyhow, it looks like Whole Foods might have to dismantle its acquisition should certain judges get their way. What a waste of time and energy if that happens.

U.S. Circuit Court Judges Janice Brown and David Tatel "agreed that this Court has the power to grant relief despite the merger having already taken place." That could mean either stopping further efforts to eliminate Wild Oats as a separate brand or possibly ordering Whole Foods to reconstitute Wild Oats, re-creating the same level of competition that would exist today if the merger had not taken place. That process, known as "unscrambling the eggs," is a rarely used remedy in antitrust law.

It would seem to make more sense just to let the merger happen, give it some time, and then see how badly luxury grocery shoppers are hurt rather than assume this will be the case. If not to allow for economic freedom to exist, then merely to set us up for the next round of hilarious opposition in say two years, whereby Whole Founds becomes accused of price gouging on life necessities such as Cornish Hens. 

But why wait for future comedy, when there's more nonsense to expose in the current situation.

The U.S. Federal Trade Commission also said that if the court ruled that the agency had a strong case against Whole Foods, the government would also seek to rebrand the acquired stores with their former Wild Oats signs and create an independent management team to supervise them.

So we could be on the way to national control of the organic and premium grocery industry, as to some this business seems too important for private market forces to control. Ahem.

For a simple way to just end the discussion with any naysayers, show them Whole Foods stock, (WFMI), it has been creamed, down massively from 52-week highs. Also, its all time high was in 2006, before the merger. Obviously a whole lot of people don't see some sort of invincible monopoly ahead due to Wild Oats being acquired! So why do a few judges see it this way? Someone should send them a WFMI stock chart, its been falling for years from its 2006 peak and speaks for itself. This debacle is complete baloney and unfit for the US.

(Vincent)

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