Wednesday, December 10, 2008

Whole Foods: FTC Living in Wonderland

Whole Foods: FTC Like "Alice in Wonderland" - Guilty! Time for the Trial!

I listened to the conference call yesterday in which Whole Foods Market announced the filing of a lawsuit asking that the FTC case alleging that their acquisition of the Wild Oats food stores in 2007 would create a Premium Natural and Organic Stores (PNOS) monopoly be moved into the federal court system.

The call was entertaining in several ways. The legal motion cites Alice in Wonderland and the portion of the fable where the Red Queen proclaims: "The Verdict is guilty! Now we will hear the evidence."

John Mackey was acerbic, expressing great frustration over the interpretations of the FTC at what constitutes a monopoly.

A shareholder from Whole Foods in attendance at Washington D.C. press conference made a witty observation about not realizing that the purpose of a monopoly was to lower prices, increase service levels, and generally be more competitive.

Whole Foods has a point. The logic used by the FTC to pursue this case a year after the merger is complete seems to be beyond comprehension.

Whole Foods Challenges FTC in Court source

Whole Foods Market on Tuesday stepped up its defense in its ongoing tangle
with the Federal Trade Commission, filing a complaint in U.S. District Court
seeking to bar the FTC from conducting an administrative trial on the legality
of Whole Foods’ 2007 acquisition of rival Wild Oats Markets.

The retailer alleges the FTC violated its right to due process by
prejudging the case against it and by “rushing to trial.” The complaint calls
for the court to issue an injunction barring the FTC from holding the trial,
currently scheduled for February, and from reviewing the case, although it would
still be free to re-file the case in District Court.

Whole Foods alleges that the FTC scheduled its own administrative trial
only after the acquisition had closed with the support of four federal judges in
August 2007. It gave Whole Foods less than five months to defend itself in 29
separate geographic areas, a requirement the retailer said was not practical.

Reblog this post [with Zemanta]

No comments:

Post a Comment

We appreciate your thoughts on the blog. Please add your comments. It helps keep the place interesting!

Everything you post will be read, and responded too!
-- Michael VanDervort