Government Moves to Block Whole Foods/Wild Oats Merger

The Federal Trade Commission is attempting to block the proposed Whole Foods/Wild Oats merger.

The Federal Trade Commission said Tuesday that it voted unanimously to file a lawsuit in federal district court to block the Austin company's purchase of organic grocer Wild Oats Markets Inc. for $565 million, excluding debt. The 110-store Boulder, Colo.-based chain is considered Whole Foods' biggest rival. Wild Oats owns two Sun Harvest stores in Austin.

"Whole Foods and Wild Oats are each other's closest competitors in premium and natural and organic supermarkets, and are engaged in intense head-to-head competition in markets across the country" Jeffrey Schmidt, the commission's director of the Bureau of Competition, said in a statement. "If Whole Foods is allowed to devour Wild Oats, it will mean higher prices, reduced quality and fewer choices for consumers."

The FTC's statement can be found here.

Update: Supermarket News has a report on Whole Foods' other news for the day--the opening of its London store. The site also has a take on the FTC announcement.