The U.S. federal government has brought many ridiculous antitrust lawsuits, but this one is one of the stupidest. They are going to court to block the propsed merger between Whole Foods Market and Wild Oats, saying this would monopolize the retail health food industry:
When the U.S. government goes to court this week to try to block Whole Foods Market Inc.'s planned purchase of Wild Oats Markets Inc., the judge will wrestle with this question: Which of John Mackey's arguments is most convincing?
The Federal Trade Commission contends Whole Foods and Wild Oats operate in a distinct market for premium natural and organic groceries and the $565 million deal would curtail competition and raise prices in that segment. To make its case, the agency is relying on comments by Mr. Mackey, the chief executive of Whole Foods, which suggest he considers his company's playing field different than that of typical grocers.
"Safeway and other conventional retailers will keep doing their thing -- trying to be all things to all people," Mr. Mackey has said, according to the FTC. "They can't really effectively focus on Whole Foods' [clientele]."
To see just how ridiculous this lawsuit is, compare the 2006 sales revenue of Whole Foods and Wild Oats with some of their competitors in retail grocery:
Whole Foods $5.6 billion
wild Oats 1.2 billion
Safeway 40.2 billion
Kroger 66.1 billion
A&P 6.8 billion
And this list doesn't even include Walmart, nor Target. (I scanned their annual reports but was unable to determine what portion of their sales are derived from groceries.)
It is ludicrous for the government to worry about the acquisition of a grocery chain that has less than one percent of the total sales in the USA. It is time that the government stayed out of business affairs altogether. They should stick to enforcing contracts and enforcing the criminal laws, especially the immigration laws. And try to protect the country from foreign enemies, include illegal immigrants.
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