Labels: Free Market
The Federal Trade Commission has said that they would oppose the merger of Wild Oats Market Inc. and Whole Foods Market Inc. and have started legal proceedings in this regard. Whole Foods announced in February that it planned to acquire Wild Oats for $565 million.I hope these companies fight and win. The feds have no business injecting themselves into the free market process. If for some reason this merger isn't in the best interest of consumers, then the market will take care of it.
The main reason for this according to the anti-trust regulators at FTC is that this merger, if it happens, would bring anti-competitiveness in the market. This would lead to higher prices, lower quality products and fewer choices for the consumers.
Both companies have said that they would fight against the FTC suit "tooth and nail" as FTC has completely ignored the robust competition in the supermarket industry. The FTC on its part argues that the market place is defined by natural and organic food stores and not the broader supermarket industry. ...
... Market experts believe that the merger is more important for Wild Oats than for Whole foods as it has struggled to compete against its larger rival. For Whole Foods, their future is much more going to be about organic growth and how their new stores do in places like London and Columbus, Ohio etc. If Whole Foods and Wild Oats never end up merging, it's not a game changer for Whole Foods. It is for Wild Oats.
The problem is that if this merger is blocked, then Wild Oats Market goes under. Kaput. That means consumers will suddenly find their choices limited. And depending on where they live, they may no longer have access to the wide selection of all-natural, organic foods to which they have grown accustomed. Who do the folks at the FTC think they are to decide what's best for the rest of us?
I doubt sincerely that the FTC's motivation has anything to do with protecting consumers. If I had to guess, I'd say the government is looking to protect "other interests."
Labels: Free Market