FTC ONCE AGAIN SEEKS TO BAR WHOLE FOODS/WILD OATS MERGER

FRom an Industry newsletter today:

The Federal Trade Commission says it will hold full administrative hearings on the 2007 merger between Whole Foods and Wild Oats that it originally sought to block. A federal judge ruled in 2007 that the Whole Foods/Wild Oats $565 million merger was legit and blocked the FTC's antitrust challenge. However, a federal appeals court overran the decision two weeks ago, effectively re-opening the issue on the grounds that a trial judge improperly dismissed the FTC's preliminary challenge to the merger.

The FTC believes the merger would lessen competition in the natural and organic foods industry. However, Whole Foods and Wild Oats have already completed their merger.

An FTC spokesman said Monday that the commission had no comment on what remedy it is now seeking, according to Dow Jones newswires. But in legal filings with the federal appeal court, the commission raised "the possibility of reconstituting Wild Oats as an independent competitor."

Whole Foods could appeal to the federal courts if it loses the hearing in front of an administrative law judge. It could also make an appeal of last month's ruling but it's not clear if they're planning on doing so.
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Regardless of my personal opinion on this merger and whether it's monopolistic or not, I'm shocked that the FTC could reverse this after the merger has already taken place.

Deb

I am baffled by what the FTC is doing here. What in the world is WF supposed to do at this point? What a bunch of nonsense.

This is the court's ruling not the FTC's. And as for what the result may be... Whole Foods may have to divest itself of the Wild Oats assets...
In other Whole Foods news their shares have hit a 7-year low on shrinking revenue , terrible 2Q results and an e. coli outbreak traced to hamburger sold at one of their stores in MA.
They scrapped their dividend and appear to be in real trouble.
Meanwhile they still claim to be the greatest store since 7-11.
Meanwhile I'm still shopping at Farmer's markets, Aldi and Costco.

Actually, revenues were up $300 million, but same store sales slowed to a multi-year low. Clearly the "marginal" customer has shrunk their basket size in recent months, as traffic count was still up, but average check was down. My guess is customers are switching to private label and lower-priced perishables.

My mistake, revenues up on increased store count due to merger while profits down 30%.
Still shares are tanked. I feel bad for anyone who bought in the last 7 years.

I do so love my Costco.

[Robin Garr]

I do so love my Costco.

I want to love Costco. They have great, quality merchandise, and as a company, they are the benign alternative to the Evil Walmart/Sam's Club.

But we reluctantly gave up our membership card when the second year came due. Reasons: (1) Too far out in the 'burbs for these urbanites ... we rarely went out there. (2) And when we did, we were constantly passing on great things because the quantities were too much for a family of two.

I also found their treat-everyone-like-a-thief inspection at the exits a bit offensive, but I probably could have gotten over that if it hadn't been for (1) and (2).

My mistake, revenues up on increased store count due to merger while profits down 30%.
Still shares are tanked. I feel bad for anyone who bought in the last 7 years.

That's what TP is saying. Same store sales way down, which is how retail companies are measured. I am sure part of the drop in profits is associated not only with the economy but also with the costs of acquisition. Every time there is a big acquisition, the acquirer spends tremendous amounts of money integrating the new company. I can't remember the last acquisition where a company's short term profits did not take a hit. I can imagine what those legal bills were alone. My husband worked on that deal and when I think about his billing rate, the hours he put in, and multiply that by the hundreds that worked on the deal, it is a pretty good chunk of change.

This is the court's ruling not the FTC's.

Not entirely true, the Appeals Court only reviewed the case because the FTC requested a review. If the FTC had dropped the case the courts would have too.

TP
are you sure you're not employed by the Whole Foods, you certainly seems to have their numbers and lingo down to a T

someone should ask Whole Foods Louisville about their recycling program (last i heard, all of the recycling continues to head to the landfill)

i'm sticking with my farmers market

the merger seems to have went well for WF though, eliminate a few thousand jobs and the competition, good work, the wally world of "natural" is taking over the world

TP
are you sure you're not employed by the Whole Foods, you certainly seems to have their numbers and lingo down to a T

someone should ask Whole Foods Louisville about their recycling program (last i heard, all of the recycling continues to head to the landfill)

i'm sticking with my farmers market

the merger seems to have went well for WF though, eliminate a few thousand jobs and the competition, good work, the wally world of "natural" is taking over the world

I always wondered about recycling as hundreds of pounds of "donateable" goods were ferried to the dumpster......! Sorry I missed you at Corbetts Shawn (didn't see that post till Sunday..hope it was a happy time baby!) Let's get together soon otay? On topic.....companies are never what they seem...or pretend to be......just basic greed wrapped up in really pretty (all natural, hormone, antibiotic, steroid free) packaging!! Walmart..with a pretty face...Farmers market it is!!

Shawn,
I am not sure if TP works for WF or not but what is your problem with them? WF fills a need. I just moved to St. Matthews pretty close to the Beargrass Christian Church Farmers Market. I love it. We go almost every Saturday that we are in town and support them. The problem is that what happens if the Farmers Market doesnt have what I need? Shall I drive out to Aldi (I only know of the one in Buechel) or buy 6,922 of them at Costco? Maybe I should drive to Creation Gardens? Am I bad because I can drive right down the street to WF and get it? What's a person to do?

[Robin Garr]

Shawn,
I am not sure if TP works for WF or not

Elizabeth, TP does not work for WF. He is a long-time, respected forum member and an expert on financial issues. Please don't be too quick to accuse people ... generally speaking, "stealth spammers" get outed pretty fast around here, and TP is not one of those.

Doll's on Brownsboro is a great alternative to Whole Foods in that they have alot of the same merchandise at a slightly lower price. I shop at Whole Foods periodically...I like their seafood....especially the whole fish options. But many days I'm cruising through Doll's around 5:30.

I won't shop at Costco cause I don't need anything in large quanity and I hate the look of the building.

shawn, matt, dave...all former employee's of whole foods...the first 2 were fired...hence all the nasty posts you find on this forum. please take anything these folks say with a grain of salt (no sort of grocery store pun intended). i dont usually say much about it...but it's just absurd the amount of trash they spout on here. anyone ever notice that when one of them starts something it's not long till the other two pipe up? and for the record everything thing that gets put into a recycling or a compost bin at whole foods is ALWAYS recycled or composted, the only exception to this is if the recycling company deems a load of recycling too contaminated with non-recyclables...which does happen, though rarely. it's time for the whole foods bashing on this forum to end...there's alot of great people that work at this store and it's not fair for the three of you to constantly drag their names thru the mud.