Wednesday, December 3, 2008

Update on "We're Just Trying To Mind Our Own (Local) Business." The Oregonian Weighs In.

The Oregonian has weighed in with their perspective about Whole Foods Market subpoenaing copies of some of our most confidential financial records, including our strategic plans, our marketing plans and our studies about where we are considering opening new stores. Here's the Oregonian story from this morning's paper, New Seasons fights chain's subpoena and here's the editorial board's take on the situation, Special on chutzpah, Aisle Three.

Looks like there's a problem with the link to the Oregonian editorial right now. Here's a copied and pasted version:

Special on chutzpah, Aisle Three

by The Oregonian Editorial Board
Wednesday December 03, 2008, 4:11 PM


Whole Foods, already under fire for its anticompetitive conduct, pushes its luck
There's silly and there's federal government silly, as New Seasons Market is finding out.

The privately owned, Portland-based chain of natural and healthy grocery food stores has been asked, and may be ordered, to provide a raft of confidential information to a much larger competitor, Whole Foods Inc. Information such as "all documents discussing competition with Whole Foods or Wild Oats," "all market studies relating to competition," "all documents relating to the sales of natural or organic products in your stores," and, most audaciously, "for each store provide the total weekly sales for each week since Jan. 1, 2006." That's what Whole Foods' lawyers say they want from New Seasons.

And what has New Seasons done to call down such burdensome demands for disclosure of its private, proprietary information? Its crime is running a successful chain of grocery stores in the niche that Whole Foods has tried to dominate, partly by its takeover of Wild Oats, the chain that has since disappeared from the Portland area.

In the spring of 2007, the Federal Trade Commission weighed in with objections to the planned merger, arguing convincingly that it would reduce competition and thus, raise prices to consumers. The agency showed that Whole Foods had secretly plotted to crush Wild Oats and dominate the industry, specifically citing its concerns about price competition in Portland. (At roughly the same time, Whole Foods CEO John Mackey was discovered to have been posting critical comments about Wild Oats on public blogs under a pseudonym.)

Despite the continuing regulatory opposition, as you may have noticed, the merger proceeded. After taking control of Wild Oats, Whole Foods quickly shut down three of the newly acquired stores in the Portland area and renamed the rest.New Seasons stayed out of all that messiness. CEO Brian Rohter said the chain never expressed any opinion about the merger and obviously, wasn't a party to it.

Yet now, as the rather pointless dispute between the FTC and Whole Foods grinds on, New Seasons is being asked to supply its primary competitor with a raft of private information that would never otherwise be available for outside scrutiny. And Rohter says his lawyers tell him he may actually be forced to comply with the request, although New Seasons has filed its objection to doing so.


Nothing about Whole Foods' behavior so far suggests that this is a benign request for onformation. Rather, it is a nakedly anticompetitive maneuver intended to hamstring its strongest rival in the Portland area.

The FTC is entitled to proceed with its dispute with Whole Foods, and in the end, may improve competition in the market by doing so. But it shouldn't reward Whole Foods' history of deceptive conduct by granting it the key to its competitors' vault of secrets.

Quash the Whole Foods subpoena. Let the company compete in the marketplace, not in a Washington, D.C., hearing room.

If you don't know what we're talking about and want to learn more, take a look at the blog posting below this one, We're Just Trying To Mind Our Own (Local) Business. There's lots and lots of info (and many opinions) there.


24 comments:

Anonymous said...

A new type of "phishing" expedition.

Anonymous said...

"Yet now, as the rather pointless dispute between the FTC and Whole Foods grinds on..."

Pointless indeed.

This case was closed last year by the US Court of Appeals:

"On August 23, 2007, the United States court of Appeals for the District of Columbia Circuit denied the Commission's emergency motion for an injunction pending appeal. As a result, Whole Foods' acquisition of Wild Oats was consummated on August 20, 2007."

The merger, having been completed, makes the relief sought in the complaint a pointless endeavor. "What complaint" you ask? Don't tell my you haven't taken the time to actually read the complaint! It's the complaint that is asking for:

"4. Re-establishment of Wild Oats stores...including, but not limited to, re-opening closed Wild Oats stores, re-naming Wild Oats stores that had been changed to the Whole Foods name, reversing any consolidation of Wild Oats stores into the Whole Foods system and re-establishing the Wild Oats system, and re-establishing Wild Oats' distribution arrangements, private label products and supplier relationships;"

and

"5. The divestiture of Wild Oats stores, and Whole Foods stores, and any other associated or necessary assets, including the Wild Oats name, distribution systems or assets, and supplier relationships, in a manner that restores Wild Oats as a viable, independent competitor in the relevant markets, with the ability to offer such services as Wild Oats had offered prior to its acquisition by Whole Foods;"

among other pointless requests, which again have been made pointless because the Court of Appeals, through its actions, allowed the merger to be completed.

Does New Seasons really want Wild Oats to be resurrected in order to manufacture "competition," when in reality, the re-establishment of all the Wild Oats stores would probably result in both Whole Foods and Wild Oats folding? Is that New Seasons' idea of "competition?"

"Quash the Whole Foods subpoena. Let the company compete in the marketplace, not in a Washington, D.C., hearing room."

Tell that to the FTC. The merger was a business transaction, which was conducted in the marketplace, until the FTC decided that they needed to get involved. Whole Foods would like nothing better than to allow for open competition. What with everybody complaining about Whole Foods' high prices (can we lay "whole paycheck" to rest already?) you would think that New Seasons doesn't need the FTC to fight their battles for them.

What surprises me is that everybody thinks that the FTC's involvement is simply a distraction that will allow Whole Foods to look down it's competitors pants. As though Whole Foods is thinking, "everybody is scrutinizing our actions and watching our every move - now is the perfect opportunity to do something really sleazy and obvious!" As though Whole Foods asked the FTC to get involved because it was part of their business plan.

The reason for the subpoena is that Whole Foods is trying to build a defense against a pointless complaint. Their strategy is to show that their competitors (at least the 96 that received the subpoenas) are viable, vibrant businesses that have long-term goals and plans, despite the presence of big, bad Whole Foods. The most direct way to show that these business have such goals and plans is, well...to show those very same goals and plans. Out of context it's a ridiculous request - but so is the complaint! Think about it: Whole Foods is having to go to it's competitors to prove that their presence has not eliminated their competitors. It's as though MC Escher has taken up law: "prove to me that I've writing this statement that I wrote!"

Even within the context of the complaint, it's a far-reaching request, and New Seasons has responded with a well-reasoned argument as to why the subpoena should be quashed or limited (and they even filed it in time! good one, guys!). If all 96 subpoena recipients duck out of the document request in a similar fashion, then Whole Foods would be forced to find a different, less direct, less convincing way of showing that their competitors are...their competitors (because the FTC is unable to open their eyes and see for themselves).

New Seasons' reaction is mostly correct. The request is outlandish without a doubt, and they have every right to object, and personally, I'm glad that they have. What they have wrong is that they feel that Whole Foods is out to get them specifically. Make no mistake that Whole Foods is a business, and they're looking for market share through competition, but don't kid yourself into thinking that the core intent of Whole Foods was to get the government involved in order to gain advantage on their competitors. The FTC brought on the fight, and Whole Foods is picking up whatever sticks and gravel it can easily reach in order to defend itself. Is it pretty? No. Will it succeed? I doubt it. Will New Seasons be better off if Whole Foods loses the fight? Not really. Whole Foods is Goliath to New Seasons, but David to the FTC. Is New Seasons planning on being content with 9 stores for the rest of its existence? I doubt it. Are there other Davids out there who will see New Seasons as Goliath? Absolutely! When New Seasons is attacked for creating a monopoly in the Portland/Oregon/Northwest area, killing the likes of Zupan's or Haggen's, who will speak out for them?

New Seasons is portraying itself as the innocent bystander in the gunfight between Whole Foods and the FTC, but "New Seasons stayed out of all that messiness. CEO Brian Rohter said the chain never expressed any opinion about the merger." If New Seasons felt compelled to watch the fight without taking sides or speaking out, then they are not exactly innocent when it comes to shrapnel.

The FTC made a pointless complaint, and New Seasons did not speak out. Apparently, when the FTC wanted to step on Whole Foods' business plans, it was OK because New Seasons wasn't the target, but now...now that their names have been invoked, they're shouting, "let the company compete in the marketplace." Shouldn't you have been shouting that instead of keeping out of the "messiness" and burying your heads in the sand?

"...When they came for me, there was no one left to speak out"

Common Sense said...

New Seasons, as far as I can tell, still hasn't expressed an opinion about whether they think that Whole Foods and Wild Oats should have merged or not. Frankly, I don't think it matters to them. In Portland, Wild Oats has been Whole Foods for some time now. Stores have been re-branded & people are used to yet another name change at Wild Oats. New Seasons appears to have held its own both before and after those changes happened--no big deal.

It seems kinda silly to expect that NS would have actually made an effort to get involved in this sticky situation by speaking out in WF's defense. Nobody wants to be involved in this--Especially Whole Foods.

I sure don't remember Whole Foods speaking out in defense of New Seasons when the FTC was asking for sensitive info in the last bout of this fight. And if NS had spoken up to the FTC in defense of WF, do you think it would have really made a difference in WF's choice of subpoenas? If that's the case, then it's clearly far more than an effort to prove that they have healthy competition. If they chose not to subpoena their "friends," then it wouldn't be about competition. It would be about picking sides, playing favorites, and only seeking the private information of those retailers who were nice--competition or not.

It would be irresponsible of NS to sit back and take this outrageous request quietly, whether the FTC's treatment of Whole Foods is reasonable or not. The irony is so vivid, I can't believe that the law could see it otherwise: In the process of proving that they're competitive in this market, Whole Foods could potentially do some serious damage to the competition. Huh?

And telling all that to the FTC wouldn't make a difference. The FTC isn't the one asking for the information. It's up to Whole Foods to make this right, and fight their fight fairly. I'm sure that those other 95 competitors are watching this brouhaha very closely. Hopefully some of them will speak up in their own (and New Seasons) defense soon, too. The people sure have, and it's inspiring to see so much support for a locally-owned, heart's-in-the-right-place grocery store.

Anonymous said...

"It seems kinda silly to expect that NS would have actually made an effort to get involved in this sticky situation by speaking out in WF's defense. Nobody wants to be involved in this--Especially Whole Foods."

So as long as we keep our heads down and don't make eye contact, maybe the bully won't come after us, right? Doesn't seem very "heart's-in-the-right-place" to me. Seems kinda "better-him-than-me."

But seriously. The subpoena was not a well-reasoned effort, and I think it would set a really bad precedent if it wasn't shot down in flames (as it should be).

I don't think that if New Seasons had spoken up that they would have been on the "friends" list when the issue of a subpoena came up. Frankly, I think if the complaint had been shot down (as it was) and stayed down (as it should have), then this issues would not be before us.

Rather than saying, "why is Whole Foods picking on us?," maybe New Seasons should be taking a position on whether or not the FTC is just in their actions. If the FTC's actions are misguided, isn't it in New Seasons' best interest to help set them straight? Unless, of course, New Seasons is secretly cheering for the FTC.

The real issues is: why has the dispute been brought back to life after being closed for a year? What has changed in that time? I haven't figured that one out yet.

torridjoe said...

Hi, my name is TJ, and I'm publisher/editor of LoadedOrygun.net, a progressive community for Oregon politics and culture. We're covering the story at LO, and as advocacy journalists we're not happy at all with what WF is attempting. In my view a boycott would be fruitless, but visible public action could give WF a PR headache they'd rather not deal with, which could in turn cause them to drop their demand for NS data.

If you are interested in participating in a public information action (such as flyering or picketing a local WF store), please contact us at loadedtips-at-gmail. Now that the word has been publicized, it's time for action to begin.

Tyler said...

Dear Tyler,

Thank you for contacting Whole Foods Market. We appreciate your concerns and the opportunity to offer our perspective on this issue.

Whole Foods Market continues to defend itself against the FTC's ongoing effort to challenge the Whole Foods Market/Wild Oats merger. The FTC has targeted us in 29 major markets and asserts that Whole Foods Market does not face substantial competition from other supermarkets in all of those markets. Part of our defense includes gathering information from third parties (competing retailers and vendors) in those markets through subpoenas.

If we could defend ourselves without gathering this information we would. This is absolutely not an attempt to look at our competitors’ information. Rather, it is something our counsel must do so that they can defend Whole Foods Market against the FTC’s overreaching complaint. New Seasons is one of 96 third parties that outside counsel has subpoenaed.

Subpoenas and protective orders are a standard part of litigation practiced in virtually every antitrust case in the United States. It is important to understand that no one inside Whole Foods Market will be able to see our competitors’ information. All of the information provided by the third parties in their responses is subject to an FTC-issued protective order. The protective order prevents any of this information from being shared with any Whole Food Market employee, including in-house legal counsel. Only outside counsel and their consultants can see this information.

We find it very unfortunate that the FTC’s ongoing pursuit to affect our merger (which was consummated more than a year ago) continues to be burdensome to Whole Foods Market, other stores like New Seasons, and U.S. taxpayers. We appreciate your concern for your local stores. We are committed to making the world a better place through food choices and hope to have your continued support of Whole Foods Market.

Best regards,

Libba Letton
Whole Foods Market Customer Information Team

-----Original Message-----
From: Website Comments
Sent: Thursday, December 04, 2008 8:23 AM
To: Customer Questions (CE CEN)
Subject: Website Comments: Company Policy


From: Tyler
To: customer.questions@wholefoods.com
Store: PRT/Portland, OR - Pearl District [Pacific Northwest]
Phone: None

Message: HEY! Hands Off New Seasons you Organic Bullies! If every city in the world had a New Seasons, this world would be a much better place. Leave my grocery store alone.

Email ID: 90622
Date: December 4, 2008 - 8:23am [Thursday]

Tyler said...

Just to reiterate,… that was

Customer.Questions@wholefoods.com

sid000 said...

How dare gianto megalo Whole Foods threaten our friendly hometown homegrown natural foods stores. Hopefully WF will have to reimburse NS for their attorney's fees when this is over!!!

Jennie F said...

Thanks, Tyler. Another member of Whole Food's large PR team copied and pasted almost the same response in the comments section of Brian's previous blog post below - as well as on several other blogs in the Portland area and beyond. Portland Food & Drink, Natural Specialty Foods Memo, Free Jen, P3 and many more.

Here was Brian's response:

Paige Brady from the Whole Foods corporate office has posted here on our blog explaining their perspective on this situation. We appreciate her gumption and are thankful for her kind words about our company and our customers.

Also, Whole Foods just put out a press release, saying most of the same things as Paige and assuring us that we have nothing to fear if we’re forced to turn over all of our private information to them. I have to say that I disagree with their point of view.

Whole Foods says, “ . . . all responses are subject to an FTC-issued protective order. The protective order precludes any of this information from being shared with any WFM employee, including in-house counsel. Only outside counsel and their consultants can see this information.”

Sorry, but they’re leaving quite a bit out of that statement.

Just take a look at the history of Whole Foods actions. Last year, in the first round of this dispute, private information was subpoenaed from a bunch of grocery stores. All of those stores, including us, received the same promises of confidentiality—“only outside counsel will see these records, no employees of Whole Foods will ever see them, etc., etc”.

Then in the middle of that process, Whole Foods went to court to try to get all those same documents and files sent to their corporate headquarters in Austin, Texas so their in house counsel (the same one they’re talking about above that "will never see the private files") could look through them. Whole Foods position was, even though this attorney was an employee of Whole Foods and was on their “Leadership Team”, it was okay for her to see everyone else’s private data because she wasn’t engaged in “competitive decision making”.

Sound unbelievable? You can see for yourself at the FTC website. The link is http://www.ftc.gov/os/caselist/0710114/070620response.pdf You’ll find it on page 3. Why should we believe they won’t try that again?

And those “consultants” that Paige refers to above? Once they’ve looked through our information they’re not going to “unlearn” it. The very nature of their job means they carry things they’ve learned from one job to another. Will they ever work for Whole Foods again?

And that protective order? There’s no real penalty for violating it.

In their press release Whole Foods says, “It is important to understand that no competitor will be disadvantaged by complying with the subpoena . . .”

Sorry again, but that’s incorrect. Aside from the issues we’ve already talked about, our lawyers are telling us that it may cost us between $250,000 and $500,000 to comply with all the requirements of the Whole Foods subpoena. That may not be a huge amount of money to a company the size of Whole Foods, but to us it is a fortune.

So as much as we’d like to just say, “No worries. Let’s all just get along”, in this instance we don’t see how we can do that. Whole Foods has the ability to make this problem go away. We hope they do.

December 02, 2008

Incredulous said...

"If every city in the world had a New Seasons, this world would be a much better place."

Can you spell "irony"?

If every city in the world had a New Seasons, the FTC would probably scream "monopoly," and New Seasons would be put into a position of having to explain why the world is a better place because of their existence. People living outside of Portland would denounce the bullying "non-local" company. People who didn't understand (or weren't concerned with understaning) the facts in the case would threaten to boycott and picket. You would find yourself amazed that people could actually think that the spread of New Seasons could ever be a bad thing. People such as yourself would offend people such as yourself.

The quoted statement above can be rewritten as "their monopoly is bad, but our monopoly is good." Or better yet, "if New Seasons were the Microsoft of natural foods, the world would be a better place!" Is that what you really mean? Are you and John Mackey sharing the same ambitious/heinous visions?

Try to think more than 5 seconds into the future before you open your mouth or post a comment.

Anonymous said...

This is NOT a monopoly issue! Whole Foods and New Seasons are not the only two places to buy food, even organic food. If either one ceased to exist, the other still would not have a monopoly. This just demonstrates the public's lack of knowledge of market economy issues.

Anonymous said...

Everyone concerned about this should make it a PR nightmare for Whole Foods. Contact sites like the consumerist (www.consumerist.com) and anyone else. Start a Facebook group or put it on your site. Contact your local and national government officials to assist where possible of protecting this local company. Send an email to local to and news to get coverage. Don't let Whole Foods get away with the "we have no choice but to do this" PR line.

I don't have time to go into the legal or business details, but this invasion is not required in order to defend an anti-trust suit as Whole Foods PR is suggesting. I have no problem with the merger of these two companies, because quite frankly, there is no monopoly in this case. Everyone is overlooking the vast array of other mainline grocery chains. Product differentiation (such organic vs. traditional) in otherwise the same market (grocery stores), does not mean that two firms are not competitors. It would be like saying that Best Buy and Circuit City are not competitors because they don't offer the same mix of products.

It seems to be that Whole Foods is using the case as a way of targeting New Seasons. Otherwise, why not seek records from everyone? Are they implying that Safeway, Albertsons, Haggen, QFC, etc. are not competitors? Or is New Season just an easier target with less resources to defend the action? With a small local company, just the defense of the action alone can have a significant impact on their bottom line, let alone the consequences of the information becoming public.

I personally will not be shopping at Whole Foods and will continue to support New Seasons.

Anonymous said...

"This is NOT a monopoly issue! Whole Foods and New Seasons are not the only two places to buy food, even organic food. If either one ceased to exist, the other still would not have a monopoly. This just demonstrates the public's lack of knowledge of market economy issues."

...but the FTC is claiming that it is a monopoly issue. The FTC is trying to undo the merger between Whole Foods and Wild Oats based on the assertion that the merger creates a monopoly. The issues isn't whether the subpoena is valid (I doubt anybody who isn't on the Whole Foods legal team thinks its a reasonable request), the real question is whether the FTC's complaint is relevant or realistic.

The subpoena is an attempt to gather evidence to show that a monopoly does not exist. If the complaint goes away, then the subpoena goes away.

As you say, it's not a monopoly issue. It's not about Whole Foods trying to crush New Seasons. It's about Whole Foods having to take desperate measures in an attempt to answer to a complaint that does not make any sense - there is no basis for the complaint, and the relief sought by the complaint (the re-establishment of Wild Oats) is ridiculous.

Yes, the subpoena is foolish, and New Seasons shouldn't have to provide those documents. Now take a look at the larger picture and see where your anger needs to be focused.

Cynthia said...

Just like Tyler (above), I too wrote to Whole Foods expressing my anger at their attempts to sabotage New Seasons. The reply I received, albeit under a different signature, was the same, verbatim. I'm not up to speed on the FTC-issued Protective Order business. Does anyone else out there know, if, indeed there is an effective means to protect the information submitted from Whole Foods and/or their agents?

-----Original Message-----
From: Vicki Foley (PN RSF) [mailto:Vicki.Foley@wholefoods.com]
Sent: Thursday, December 04, 2008 2:40 PM
To: info@perfectworld.us
Subject: RE: Website Comments: Store Policy

Dear Cynthia,

Thank you for contacting Whole Foods Market. We appreciate your concerns and the opportunity to offer our perspective on this issue.
Whole Foods Market continues to defend itself against the FTC's ongoing effort to challenge the Whole Foods Market/Wild Oats merger. The FTC has targeted us in 29 major markets and asserts that Whole Foods Market does not face substantial competition from other supermarkets in all of those markets. Part of our defense includes gathering information from third parties (competing retailers and vendors) in those markets through subpoenas.
If we could defend ourselves without gathering this information we would. This is absolutely not an attempt to look at our competitors' information. Rather, it is something our counsel must do so that they can defend Whole Foods Market against the FTC's overreaching complaint. New Seasons is one of 96 third parties that outside counsel has subpoenaed.
Subpoenas and protective orders are a standard part of litigation practiced in virtually every antitrust case in the United States. It is important to understand that no one inside Whole Foods Market will be able to see our competitors' information. All of the information provided by the third parties in their responses is subject to an FTC-issued protective order. The protective order prevents any of this information from being shared with any Whole Food Market employee, including in-house legal counsel. Only outside counsel and their consultants can see this information.
We find it very unfortunate that the FTC's ongoing pursuit to affect our merger (which was consummated more than a year ago) continues to be burdensome to Whole Foods Market, other stores like New Seasons, and U.S. taxpayers. We thank you for your concern for your local stores. We are committed to making the world a better place through food choices and hope to have your continued support of Whole Foods Market.

Best regards,
Vicki


-----Original Message-----

From: Cynthia
To: n.prt.contacts@wholefoods.com,Customer.Questions2@wholefoods.com,PN.customer.questions@wholefoods.com
Store: PRT/Portland, OR - Pearl District [Pacific Northwest]
Phone: None

Message: I have been a regular customer in your Pearl District store since you opened. However, I'm very concerned that you won't have any customers left in Portland if you don't stop bullying New Seasons. New Seasons is a small local company that is a source of pride for Oregon. Many supporters of New Seasons, including my family, have also been regular customers of Whole Foods because of location and convenience. We're turning away in droves, however, due to the corporate harassment of New Seasons and your ridiculous attempt to obtain their confidential records. Please consider leaving them out of your Wild Oats acquisition matter or you will find yourself with a dramatically smaller portion of our local market. Until you drop pursuit of their records we will not spend a dime in either Whole Foods or the Wild Oats-now-Whole-Foods stores. If you are not yet familiar with this thinly disguised attempt at sabotage, please read Brian Rohter's blog here: http://newseasonsmarket.blogspot.com/

Email ID: 90142
Date: December 2, 2008 - 1:41pm [Tuesday]

Anonymous said...

All in all... this is utterly rediculous from all sides. No one that is complaining about the bullying understands the gov't decisions on handlings matters regarding the FTC. The anger isn't abut WFM as a whole but anger at the stores in NW that could be affected on WF side, or NS side. And if you truly think about it, the people that work at store level should not be attacked for this at all. In the NW, Nature's came first, Wild Oats bought them out, New Seasons was created based off the Nature's model. Now Whole Foods has bought out Wild Oats. But the anger is on a Northwest regional scale and is just plain stupid. Anyone who works for Whole Foods here, or New Seasons, probably started at Nature's or Wild Oats anyway. At least the people that have some kind of right to complain. And as far as the customer point of view... we all want to supply organic and natural products at high level of quality and as locally produced as possible, with the highest level of guest service possible. We all believe in the same thing. Customers shop at Trader Joe's for certain things, New Seasons for certain things, and Whole Foods for certain things. Some shop at one store entirely and good for them, but the bottom line... the employees on a store level that all work for these companies, love what they do and are happy to be able to spread the knowledge of healthy, good quality foods. It's about the customer. It's not about some stupid hipster feud that the Willamette Week & the Oregonian and others try to portray. LET'S JUST LIVE & LOVE HAPPILY IN OUR HEALTHY STORES!

Incredulous said...

Well said.

Thank you for for thinking it through and not simply making inflammatory remarks in anger.

Reason said...

There are two issues here:

Issue 1 - FTC / Whole Foods monopoly issue. It is absurd that this should even be an issue. As stated elsewhere, Whole Foods buying Wild Oats does not create a monopoly. That action needs to be dropped.

Issue 2 - Whole Foods seeking internal information from New Seasons. This action is entirely the choice of Whole Foods' management and is clearly overreaching. Whatever their internal strategy for doing so, this decision reflects poorly on Whole Foods and also needs to be dropped.

Despite all of the assertions above that issue 2 is either caused or justified by issue 1, it is not. The government should not be harassing Whole Foods, period. Whole Foods has no intellectually honest reason to harass New Seasons, period.

Anonymous said...

Very true. The decision to go after internal business information is incredible. No argument there.

To assume that that action is mereley a thinly veiled attempt to gain advantage is just as wrong as the FTC's claim of monopoly, however. Being skeptical is within reason, but convicting them of crimes they haven't committed is not.

Issue 1 (from previous post) doesn't justify issue 2, but from Whole Foods' perspective, can you not imagine how that information would provide a defense? It might not be the only way (and you're welcome to offer suggestions), but it is one very direct way to show that their competitors are viable businesses with their own plans for growth. It's an outrageous request, but it's not without purpose.

Outrageous does not equal illegal.

torridjoe said...

"To assume that that action is mereley a thinly veiled attempt to gain advantage is just as wrong as the FTC's claim of monopoly, however. Being skeptical is within reason, but convicting them of crimes they haven't committed is not."

They've already attempted to gain advantage in this manner once, so I'd say it's done with some empirical backing...

If you're on Facebook, I've created a page to support NS and attempt to invite WF to drop their demand:
http://www.facebook.com/posted.php?id=1108449235&share_id=38264883595&post_id=336946&comments=#/group.php?gid=38894738510

(NS has not endorsed and is not involved with this effort, although I haven't asked).

pdxbiker said...

Looking at the documents filed against the merger, it looks like they would have to bring back Wild Oats if Whole Foods loses against the FTC.

So instead of having one non-local mega grocery store, we'd have two? Seems silly to me. Anyone else?

Anti FTC said...

At least this series of comments was a little more rational than the previous post. Nice humor to several of you and for engaging in a rational conversation with some very well thought our perspectives. Couple of thoughts:

1. I love how some of you speak with such authority about leadership decisions within WF - do you work there?

2. Can we please leave Trader Joe's out of the organic conversation? It may be labeled organic, but seriously...have you tried the food?

3. Can I get an amen to the insanity of the FTC? What in the world are they still doing pushing this case...?

Anonymous said...

I shop there religiously, but that hasn't elevated me to the rank of employee.

Perhaps I speak with more authority than I posess, and I hope it's not interpreted as speaking for the company. While I think that the whole supbpoena thing is misguided, and the FTC thing is a huge waste of time, I can't help but play devil's advocate in the face of some of the New Seasons fanaticism on display (New Seasons: the friendliest store in town...with the most blood-thirsty, vindictive customers!).

I'm sure they don't represent all of New Seasons' customers, just as I don't represent all of Whole Foods' customers. It's good to be angry in the face of injustice, but please get some facts before you go burning down buildings.

Trader Joe's is great, but I don't think of them in terms of organic products.

Amen.

Anonymous said...

New Seasons is only one of 96 nonparties grocery retailers asked to divulge this information to Whole Foods, which you will see if you actually read the FTC subpeona information (it is not a New Seasons against Whole Foods Battle only!) While I think it is great PR to make a stink about it, this is how the FTC works and this is business. If anything New Seasons will gain from this whole fiasco. Personally I think Brian should share his trade secrets now to all Whole Foods competitors and franchise the business across the country and really give Whole Foods a real run for their money.

Anonymous said...

This appeared in the Oregonian today:

Craig Wildfang, a partner with Robins, Kaplan, Miller & Ciresi of Minneapolis, said subpoenas are typical in antitrust cases. His firm represents Portland's Food Front and is cooperating with the subpoena. But, he said, it's not necessarily providing all the information that was asked.

"We believe there's some give and take about what is really necessary," he said. "It would be an unusual antitrust case where there isn't some kind of effort to collect information from other market participants."

Although he's not willing to help Whole Foods through the subpoena process, Rohter said that, ultimately, he doesn't think the merger disrupted the Portland marketplace and feels the FTC's solution would be more harmful.

"If Whole Foods had to sell off those stores, I could imagine that it would be bad for our community as a whole," he said. "That could create all sorts of disruptions for the hundreds of staff people who work in their stores and for their suppliers and landlords.

"As long as we can maintain a level playing field," he said of keeping his business records private, "our community as a whole would be best served by leaving Whole Foods alone."


Take a lesson from Food Front. They're managing to help out fellow "community" member Whole Foods, protecting their ass(ets), and not putting up a stink about it.

Maybe New Seasons should be collecting funds for a better legal team.