Whole Foods Sought to ‘Avoid Nasty Price Wars’ Through Merger

WASHINGTON — Whole Foods Market was seeking to eliminate its competition by buying rival Wild Oats Markets, according to statements from its chief executive officer unsealed yesterday in the Federal Trade Commission’s complaint against the proposed merger of the two companies. “By buying [Wild Oats] we will … avoid nasty price wars in Portland (both Oregon and Maine), Boulder [Colo.], Nashville [Tenn.], and several other cities which will harm [Whole Foods’] gross margins and profitability,” John Mackey, Whole Foods’ chairman and CEO, told his board of directors. He went on to say that that buying Wild Oats also would eliminate the opportunity for traditional supermarket operators — including Safeway, Kroger and Supervalu — to acquire the chain and leverage their brand equity “to launch a competing national chain to rival us.” A hearing on the FTC’s proposed injunction to block the merger is set to begin July 31. Whole Foods this week said it will extend its tender offer yet again for Wild Oats’ shares, this time until July 20.

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