Whole Foods Plays Foul in Wild Oats Deal?
By Chuck Sudo in Food on Jul 12, 2007 4:58PM
File this under "chutzpah." An antitrust lawsuit (Adobe PDF file) filed by the Federal Trade Commission this week against Whole Foods, which seeks to block the organic food giant's purchase of its closest competitor Wild Oats, revealed that anonymous postings to business and financial forums criticizing the price of Wild Oats stock were actually authored by Whole Foods CEO John Mackey.
Mackey's postings, made under the name "radoheb" from 1999 to 2006, consistently criticized the value of Wild Oats' stock, questioned why stock market players would purchase it at the prices it was trading under, and predicting that eventually Wild Oats would fall into bankruptcy and be sold after its stock fell below $5 a share. Whole Foods announced in February that it was purchasing Wild Oats for $565 million, or $18.50 a share. One of the questions raised in the FTC lawsuit is whether or not Lackey anonymous comments influenced the price of Wild Oats' stock, making it easier for Whole Foods to purchase Wild Oats at a bargain price. The FTC is also worried that one company having so much control over a specific marketplace might lead to increased prices for consumers, although why they aren't also looking at AT&T, we don't know. We have no idea why our phone, internet, and cellular bills are a combined $145 a month when we don't make any phone calls.
In response, Mackey's started using his blog (everybody has one) on the Whole Foods website to tear the FTC a new orifice. In a post from June 27th, Mackey takes the "underdog" route, leading with the bullet point, "(p)eople who love Whole Foods Market ... can't understand why the FTC is picking on us." That's more than slightly disingenuous.
They're picking on Mackey because they suspect he engaged in shady dealings to influence the deal. Some might say that Martha Stewart went to jail for less. As a cynic who'd rather grow our own vegetables and herbs and shop locally at farmers markets, we understand the FTC's stance. For many people who embrace the concept of sustainable food, Whole Foods has earned the derisive nickname "whole paycheck" for a reason. The company has done wonders to promote the concept of natural and organic foods, but the potential merger with Wild Oats should put fear in the hearts of consumers, or at least their pocketbooks.