Friday, June 22, 2007 7:46 AM
You may have read in recent headlines that the Federal Trade Commission (FTC) has raised some issues with regard to Whole Foods Market Inc. plans to acquire Wild Oats Markets Inc.
The FTC has filed a lawsuit to prevent Whole Foods from acquiring Boulder-based Wild Oats, the second-largest natural-foods grocer after Whole Foods. The agency said the combined company would control too much of the market for natural and organic foods and harm competition. (taken from Denver Post article on subject)
Whole Foods is disputing the claims through the normal legal avenues, of course, but what is also interesting to me is how the company is using a weblog to "tell its side of the story."
Chief Executive Officer John Mackey has a weblog entitled, simply, The CEO's Blog — John Mackey.
This week, Mr. Mackey used his weblog to lay out a very detailed post regarding Whole Foods stance on the proposed Wild Oats acquisition, including why it believes the FTC's lawsuit is without merit. In the post, Whole Foods Market, Wild Oats, and The Federal Trade Commission, Mr. Mackey starts by noting the 'whys' behind his weblog posts:
It is our intention to be as transparent as possible to the outside world and to provide as much relevant information as possible to our customers, team members, shareholders, suppliers, media, and the government concerning this proposed deal. What I want to do with this blog entry is to share my personal perspective about why Whole Foods' purchase of Wild Oats is a good thing and exactly how and why the FTC is wrong in bringing suit to stop it. I will follow up this blog entry with additional blog entries as necessary to answer the FAQ's that pop up over the next several weeks.
What is particularly fascinating to me, though, is what follows this introductory paragraph:
What follows below is a memo that we sent to our Board of Directors, prior to our first Board Meeting to discuss the deal. It was written of course in confidentiality, but we believe that the FTC is using this memo (one of the 20+ million documents they required from us-more than the Exxon/Mobil merger I'm told) as one of their documents to prove their case against the deal. This document very accurately states all the major reasons we want to buy Wild Oats.
Mr. Mackey's post then precedes by laying out, item by item, the bullet points that were included in the memo, but with significant added detail as to what was meant by the bullet points and/or the Whole Foods' position on each bullet point.
What I also found interesting about this post was the Whole Foods allowed for comments, and there were some intriguing ones that seemed to suggest some of Mr. Mackey's and Whole Foods' possible goals for this post are being achieved. See what you think:
John, i found this to very infomative and helpfulin understanding the merger. i am a team member @ the largest store in CO. and i am also a shareholder so this goes a long way in understaning how the goverment works in these matters. i will watching for other blogs in the future. thanks and good luck.
Posted by: anthony connor at June 19, 2007 06:53 PM
I really appreciate your open and candid communication with public (includes customers and shareholders). I am not sure if you read about the recent FTC challenge to merger of Western Refining and Giant Industries.
But, what happened finally ? FTC was defeated because their arguments did not make sense. I am sure same will happen with this (WFMI and OATS) merger challenge.
Good Luck !
Posted by: Amit Gupta at June 19, 2007 07:11 PM
Your comments about "eliminating the competition" further supports the need for a legal strategy that directly counters the FTC's narrow view rather than try to convince the courts that Whole Foods competes in the supermarket industry.
Posted by: John Hauser at June 19, 2007 08:01 PM
John Mackey continue to stand by your principals. I am writing to my Congress women and Senators about this. The FTC has never protected the public by blocking a merger, Telco and big Oil are prime examples of mergers that have cost consumers billions of dollars. WFM and Wild Oats are mere specs and flies as they relate to the food industry and real good giants. Those of us that shop and understand the brand and the quality products and protections WFM provides should be allowed to grow prosper and merge...Lets just hope the Safeways of the world don't make a pitch for WFM and destroy the brand and employees as they have done with their markets and employees. SHAME on you FTC...but then again SHAME on all things from this administration.
Posted by: Ron Blitzer at June 19, 2007 09:06 PM
I looked, but was unable to find any similar type posting on the Whole Foods matter from the FTC. The FTC does have a weblog, see FTC Launches Blog in Advance of Upcoming Tech-Ade Hearings , but appears to have a specific focus, rather than being general in nature. I wonder if the FTC will ultimately launch a weblog to lay out its side of the matter(s) in dispute?
In the end, I don't know enough about Whole Foods matter to have a specific opinion as to the merits of the FTC's suit. I simply wished to point out what I thought was an innovative use of the weblog form. I can imagine that, among lawyers, there will be a wide range of opinion as to whether such a public post is a good idea.
Regardless, it seems to me that with each new use of a weblog in relation to a legal dispute, their perceived value and viability continues to grow. Again, here is the link to Mr. Mackey's post: Whole Foods Market, Wild Oats, and The Federal Trade Commission