Despite the fact that Whole Foods Markets' $565 million purchase of Wild Oats Markets, Inc. went through more than a year ago, the Federal Trade Commission continues to investigate whether the merger creates a national natural foods monopoly. And the latest twist in the saga is once again lighting up the blogosphere.
Until a couple of days ago, most people outside the Portland, Ore.-area had never heard of New Seasons Market. But thanks to the most recent development in the FTC inquiry, this privately owned, nine-store natural grocery chain is being pegged as the scrappy David facing down the Whole Foods Goliath.
New Seasons is one of 96 stores nationwide that have been subpoenaed by Whole Foods for proprietary information, including two-year's worth of weekly store sales figures, any internal communications referencing the Whole Foods/Wild Oats deal, and all plans for expansion or renovation relating to natural and organic merchandise. Whole Foods stated that the information would be shared only with its outside counsel, and would not be made available to any Whole Foods employees or in-house consultants.
New Seasons CEO Brian Rohter responded in a message on his company's website on Monday that handing over its information to its largest competitor would be like "trusting the fox to guard the hen house." He added that complying with the subpoena would "unfairly [add] to [Whole Foods'] already large size and financial advantage." But, if Rohter refuses to comply, he could be held in contempt of court and subject to fines or even jail time.
Paige Brady, a Whole Foods representative, responded to Rohter's post yesterday with her own post on naturalspecialtyfoodsmemo.com, arguing that Whole Foods needs its competitors' information to defend itself against monopoly allegations. "Since the FTC insists that we have harmed these markets, we have to defend ourselves by showing that these markets are doing well. Part of our defense is based on gathering information from third parties through subpoenas, mostly from competing retailers but also from some vendors who supply Whole Foods Market," Brady said.