 On Point Vincent Carroll, editor of the editorial pages, writes his On Point column most weekdays. He is also an author and freelance writer. Reach Vincent Carroll at carrollv@RockyMountainNews.com. |
Carroll: FTC feeling its Oats
So now we know what the Federal Trade Commission apparently considers the smoking gun in its blockheaded attempt to bar the purchase of Wild Oats by Whole Foods. It’s the words of chatty Whole Foods CEO John Mackey, who told his board of directors that buying Wild Oats would avert “nasty price wars” in a few markets such as Boulder as well as “eliminate forever the possibility of Kroger, SuperValu or Safeway using their brand equity to launch a competing national natural/organic food chain to rival us.”
Doesn’t the FTC, with its vast public resources, employ any economists on its staff? Didn’t they bother to warn that the larger meaning of Mackey’s claim, which is solemnly recounted in the agency’s lawsuit, is starry-eyed nonsense whether he believes it or not?
Whole Foods can no more “forever” eliminate the prospect of a rival “natural/organic food chain” than it can corner the market on CEO braggadocio, however much it tries. Successful business models are always imitated and Whole Foods won’t be the exception if customers keep migrating its way.
On the one hand, an FTC official argues that “if Whole Foods is allowed to devour Wild Oats” — notice the obnoxious use of “devour” to describe such a transaction — “it will mean higher prices, reduced quality, and fewer choices for consumers.” Not content with this dire forecast, the agency goes on to suggest that such a reckless “exercise of unilateral market power” by Whole Foods will essentially be immune to consumer backlash or effective competition, citing Mackey’s grandstanding rhetoric as evidence.
Yes, the purchase of Wild Oats will leave Whole Foods in a stronger position. As Mackey himself points out on his blog, “it is a simple truism to say that if we merge together that we will no longer compete against each other. However .
Although Whole Foods is “the largest operator of premium natural and organic supermarkets in the United States,” as the federal lawsuit repeatedly points out, it still isn’t close to dominating the market for organic/natural foods. And it is barely a blip on the screen of the total retail grocery market.
The notion that its customers will be left helplessly hostage to “higher prices” and “reduced quality,” if those indeed are Whole Foods’ sinister goals, is something only a dedicated regulator could fall for.
Gird yourselves
Other than congressman Doug Lamborn and an Army general or two, is there anyone in Colorado who actually favors the Army’s proposed expansion of the Piñon Canyon Maneuver Site by 418,000 acres?
Let’s see: The legislature and governor oppose any condemnation of private property on the project’s behalf. Local opposition to the land grab appears all but universal. And two U.S. House members, Republican Marilyn Musgrave and Democrat John Salazar, have become so energized on this issue that last week they persuaded their colleagues to vote 383-34 to withhold funding from any such scheme.
Any other project — public or private — that faced such comprehensive hostility would be considered dead already. But of course the Piñon Canyon plans are still very much alive. The Army is patient, persistent and in for the long haul — and it has many powerful friends. Colorado opponents should steel themselves to push it back again and again.
Vincent Carroll is editor of the editorial pages. Reach him at carrollv@RockyMountainNews.com.
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