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Reuters reports this morning that Whole Foods and the Federal Trade Commission (FTC) will find themselves in a federal appeals court today to argue whether the retailer should have been allowed to acquire rival organic supermarket chain Wild Oats.

The FTC will argue that the US District Court in the case did not act properly in failing to prevent the $565 million purchase from taking place, though it is unclear whether the courts would be able to ubnravel a deal that closed last August and which already has resulted in the integration of the two companies' stores and operations.

The original FTC argument in the case was that the combination of the nation's two largest organic/natural supermarket chains was against antitrust law because it would have a negative impact on competition. Whole Foods countered that the two chains were actually relatively small players in a much larger category – all supermarkets – and that the organic/natural segment should not be considered to be separate and distinct.

While the courts so far have sided with the Whole Foods position, the FTC seems unwilling to let go, and also is purusing what are called "administrative proceedings" against the acquisition.

KC's View:
On what planet is the Whole Foods-Wild Oats deal considered in violation of antitrust law, and yet the government seems to show very little concern about the fact that Rupert Murdoch could end up owning, just in the New York metropolitan area, the New York Post, Wall Street Journal, Newsday, and the local Fox television affiliate?

I don't get it.

Beyond the fact that I think that Whole Foods' argument is correct – and have said so from the beginning – as a taxpayer I am offended that these FTC guys are like rapiud dogs with a hunk of raw meat...they just can't let go, and they're spending tax dollars to try to win a game that ended months ago.

Memo to the FTC: Pay more attention to Murdoch. There may be a real antitrust case there.