Date: June 6, 2007
Lincoln, Nebraska
Contact Information:
Fred Stokes, 662-476-5568 or
601-527-2459                        Michael Stumo, 413-854-2580


P.O. Box 6486 - Lincoln, NE 68506 - www.competitivemarkets.com
    
     

OCM Praises FTC Decision to Block Organic
Retail Supermarket Merger
     
 

The Organization for Competitive Markets is heartened by the Federal Trade Commission’s decision to sue to block the Whole Foods Market acquisition of Wild Oats Markets.  The two companies compete in the premium natural and organic food sector.  Allowing the merger would force down wholesale prices paid to organic and natural farmers – while raising retail prices, reducing quality, and decreasing choices for consumers.

“The FTC has posed few antitrust challenges during this recent merger boom,” said Keith Mudd, OCM president.  “The agency’s decision to seek a court restraining order and injunction in the U.S. District Court in Washington to prevent the merger is a good start to reversing that trend.”

On February 21, 2007, Wild Oats agreed to be acquired by Whole Foods.  The companies are the number two and number one, respectively, firms in the organic and natural foods supermarket sector.  The FTC determined that the organic/natural food market was differentiated from the conventional food retail market.  The Commission voted 5-0 to file a complaint to block the merger.

“Retail supermarkets have been a large part of the problem in forcing consumer food prices up, especially perishables like dairy, meat and produce – while reducing the farm share of the retail dollar,” continued Mudd.  “A competitive market would enable farmers to share in both consumer food price increases, and declines.  But instead, the processor and retail sectors leverage supra-competitive profit margins because of their market power.  Efficiency claims have been mere vapor, and not real.  Farmers have, in contrast, increased efficiency and reduced their margins.”
     

The Organization for Competitive Markets is an nonprofit organization working for open and competitive markets as well as fair trade for American food producers, consumers and rural communities.