ChewsWise Blog

ChewsWise Blog

Whole Foods Deal for Wild Oats Back in Court

As the saying goes, it ain't over til it's over.

The U.S. Court of Appeals for the District of Columbia Tuesdayreversed a lower court decision that allowed the world's largest organic and natural foods grocery chain, Whole Foods Market, to buy its rival Wild Oats Markets.

In a 2-1 split, the appeals court ruled that that a lower court made an error when it gave Whole Foods approval last summer to go ahead with the merger, despite the request by the Federal Trade Commission (FTC) for an injunction to block the deal.

The decision sends the lawsuit back to the U.S. District Court for the District of Columbia, where Judge Paul Friedman had presided over the case before being appealed. Although the lower court was instructed to give further consideration to the case, the ruling does not undo the merger.

To date, Whole Foods has sold almost 40 Wild Oats stores, closed a dozen and converted many more to Whole Foods stores.

In a recent interview with ChewsWise, Whole Foods CEO John Mackey said: "We paid all the shareholders, we sold off the Henry stores, we integrated Wild Oats into our system, we’ve shut down several stores, changed the name of many of the stores – so the eggs are scrambled and mostly eaten."

The question now is whether the court will try to unscramble the digested eggs.

The Wall Street Journal opines: "The ruling ... may give the FTC a shot at forcing Whole Foods to sell some operations to meet competitive concerns raised by the merger."

“We await the U.S. District Court’s response so this issue can be resolved,” Whole Foods said in a statement. “Meanwhile, it is business as usual.”

- Samuel Fromartz, with contributions from Sustainable Food News