Whole Foods buyout would push up prices, groups say
DALLAS » Three consumer groups are siding with antitrust regulators in opposing Whole Foods Market Inc.'s bid to buy a rival natural and organic food retailer, saying it would lead to higher food prices.
The consumer groups said that without a merger, Whole Foods and Wild Oats Markets Inc. would expand and compete with each other, providing a benefit to shoppers.
The brief was filed in federal district court in Washington by the Consumer Federation of America, the American Antitrust Institute and the Organization for Competitive Markets.
Whole Foods announced earlier this year that it agreed to buy Wild Oats for $565 million. The Federal Trade Commission sued to block the sale on antitrust grounds, and a hearing was held last week.
A federal judge in Washington is expected to rule soon whether to continue an injunction that has blocked Austin-based Whole Foods from completing the deal.
The consumer groups said in their brief "we believe this merger will lead to higher prices, less service and diminished consumer choice."
The outcome of the FTC's lawsuit may hinge on the definition of the organic and natural food market. Whole Foods argues that it competes against many supermarkets, including national chains that sell organic produce.
The consumer groups endorsed the FTC's argument that Whole Foods competes in a much smaller, upscale market for premium produce.
Like the FTC, the consumer groups sought to turn the words of Whole Foods Chief Executive John Mackey against his company. They cited an internal memo in which the CEO said buying Wild Oats would eliminate a competitor and help Whole Foods avoid "nasty price wars."