Whole Foods Markets Inc. and Wild Oats Markets Inc. said last week that a court hearing has been scheduled for July 31 to decide whether the Federal Trade Commission can block the merger of the nation's two largest natural foods grocers.
And Austin, Texas-based Whole Foods took its campaign against the FTC's challenge public last week, adding a section to its Web site specifically to post information about the proposed merger.
The FTC filed a lawsuit on June 5 to block Whole Foods' $670 million acquisition (including $106 million in debt) of Boulder, Colo.-based Wild Oats, saying the combination will cause "significant harm to the consumer." The suit, filed in U.S. District Court in Washington, D.C., argues that Wild Oats and Whole Foods are "one another's closest competitor" in 21 markets.
But in its Web posting, which includes a document presented to the FTC in May, Whole Foods says the merger would not cause a significant change in the cost of groceries. The grocer said a "basket" at its stores would cost an average of $32.54, an increase of 4 cents, after its acquisition of Wild Oats.
Whole Foods said the FTC misinterpreted its financial data and has not proved that Wild Oats is its "closest substitute."
Whole Foods and Wild Oats, with 300 stores and nearly $7 billion in combined sales, account for nearly 25 percent of the natural products market. The companies argue that the FTC isn't taking into account increased competition from large traditional supermarket chains that are boosting their own organic and natural products.
"Our approach at Whole Foods Market is to be as open and transparent as reasonably possible," said Whole Foods founder and CEO John Mackey in a blog post on the site. "We hope it will help our stakeholders understand Whole Foods Market's position as we move through the legal process?"
Mackey promised a more extensive posting this week.
Large segments of the FTC's 16-page lawsuit are blacked out, including the number of Wild Oats stores that would close as well as several statements from Mackey. In a court hearing last week, Judge Paul L. Friedman reprimanded Whole Foods for trying to keep some information in the FTC complaint secret.
"You're going to have a real problem with me if you want to keep this stuff sealed," Friedman said, according to reports.
A Whole Foods spokeswoman said the company cannot comment on the proposed merger.
The hearing is scheduled to conclude on Aug. 1. Financing for the merger expires on Aug. 31.