The phrase trust-busting always conjures sepia-toned images of pince-nez, Rough Riders, and bushy mustaches to me. But it's actually is alive and well: Yesterday, Whole Foods—apparently the Standard Oil of the 21st century—was hauled back out on the Federal Trade Commission's chopping block.
In early 2007, Whole Foods merged with another organic grocery chain, Wild Oats. The FTC decided that this looked like a trust that needed busting, arguing that "core" organic consumers would be stuck with only the Whole Food/Wild Oats hybrid for their shopping. We're talking about the people who need quinoa like turn-of-the-century householders needed their lamp oil.
A fast track decision let the merger continue, accepting Whole Food's argument that Wal-Mart and other traditional grocery stores have greatly expanded their organic offerings, and that even after the merger the chain has plenty of competition. But now an appeals court has revived the case by bouncing it back down to the lower court.
I, of course, am skeptical of anti-trust activity. I cringe just a little bit whenever I hear about a particular merger being slowed down substantially over monopoly concerns. I'm glad the XM-Sirius merger was approved last week, even if they had to make some ridiculous concessions.
Anyway, I thought this story was worth noting for similar reasons. Is it hard to imagine Wal-Mart and other grocers entering the organic food business if they thought they could make money in it? If Whole Foods raises prices to a high enough level, you can bet they'll jump in the fray with gusto and push prices back down.
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