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Tuesday, December 9, 2008

Food / News Whole Foods Goes After New Seasons' Internal Documents

Posted by Erica C. Barnett on Tue, Dec 9, 2008 at 3:40 PM

Updating Patrick's post from last week: Whole Foods Market's dispute with the Federal Trade Commission over the larger company's takeover of Wild Oats Market has hit very close to home: the 270-store natural-foods behemoth is seeking to force New Seasons Market (Portland's nine-store natural-foods chain), to divulge confidential records, including market studies, strategic plans, expansion proposals, product lists, and weekly sales information for the past two years.

Although New Seasons is not involved in the lawsuit, Whole Foods says it needs the information to demonstrate that its takeover of smaller competitor Wild Oats is not harming other competitors. The battle has been documented in the Oregonian, on Gourmet's web site by Barry Estabrook (who wonders why, "with major airline mergers and multi-billion-dollar banks rushing to leap into bed with each other," the FTC is fixated on a relatively minor half-billion-dollar merger), and in painstaking detail on New Seasons' blog, where company CEO Brian Rother expresses doubt that Whole Foods will keep his company's private information private.

Whole Foods says that we should give our information to their lawyers and they claim the lawyers won’t let anyone else in the organization see them. That’s like trusting the fox to guard the henhouse… and we don’t have any faith it’s going to work like that.

I’m sorry to say this, but some of the people at Whole Foods have a history of less than stellar behavior when it comes to competing fairly. There are two obvious examples of this. First, last year, their CEO John Mackey was caught posting derogatory information online about Wild Oats, using a made up screen name. Here’s a New York Times story about that.

Second, during the first round of this law suit last year, the FTC released a bunch of e-mails that some Whole Foods executives had sent over the previous few years… Just to give you a flavor of it, below are a few excerpts of Whole Foods’ comments in regards to Wild Oats:

“Wild Oats needs to be removed from the playing field...”

“…[m]y goal is simple… I want to crush them and am willing to spend a lot of money in the process.”

“...elimination of a competitor in the marketplace, competition for sites, competition for acquisitions, and operational economies of scale. We become the Microsoft of the natural foods industry.”

Yikes!

Rother writes that New Seasons is "running up whopping legal bills" fighting Whole Foods, and he told the Oregonian he estimates collecting the information in the subpoena could cost $500,000.

 

Comments (4) RSS

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1
Patrick Alan Coleman blogged about this last week.
Posted by Paul Cone on December 9, 2008 at 4:01 PM · Report
2
So did everyone else.
Posted by Your name here on December 9, 2008 at 4:23 PM · Report
3
That's the Merc for ya!
Posted by jake on December 9, 2008 at 5:43 PM · Report
4
I've gotta assume the initial reference to Patrick's piece was added after the fact with no mention made of the edit. Classy, Erica. Just when we thought blogtown couldn't drop their standards any further.
Posted by A cat on December 9, 2008 at 6:02 PM · Report

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