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Bloomberg News reports that the Federal Trade Commission (FTC) is citing Whole Foods CEO John Mackey’s own words in its effort to stop the retailer’s proposed $565 million acquisition of Wild Oats.

According to the FTC, Mackey sent an email to members of his board of directors saying that by acquitting Wild Oats, “We eliminate forever the possibility of Kroger, Supervalu, or Safeway using their brand equity to launch a competing national natural/organic food chain.” In other words, the deal was being made to reduce competition.

Bloomberg says that on his blog, Mackey dismisses the FTC allegation and says that all mergers are designed to reduce competition. “This is so self-evident to me that I really can't understand why the FTC wants to make a big deal out of it,'' Mackey writes. “If the FTC is opposed to the elimination of all competition, then I don't understand why they approve any mergers?''
KC's View:
Mackey is at least partially right…and seems like he’s being completely candid on this issue.

But I still think that it shouldn’t even matter whether Safeway or Kroger or anyone else would start up a chain of natural/organic food stores. Those companies already are competing with Whole Foods and Wild Oats by expanding their natural/organic ranges in their existing mainstream supermarkets. That’s their best and most effective way to compete – not by launching new chains of specialty food stores.

The FTC argument is specious. Big surprise there.