Whole Foods-wild Oats Merger: An Antitrust Concern?

Lynne Kiesling

Instead of worrying about XM-Sirius satellite radio, should antitrust authorities investigate the Whole Foods-Wild Oats merger? Here’s my unsurprising answer (particularly unsurprising to my three very close friends who are antitrust economists): probably not.

The core first questions are the same: what are the relevant substitutes, and would consumers be better or worse off relative to their well-being in the absence of the merger? Not having any extensive expertise in grocery markets, I can still imagine several viable substitutes/competitors that would provide rivalry for some or all of a merged Whole Wild Foods: Trader Joe’s, local farmers markets, CSAs (community supported agriculture), organic Wal Mart supercenters, and so on.

A personal anecdote on this point: since our Trader Joe’s opened and since we started subscribing to a farm four years ago, my purchases at either Whole Foods or Wild Oats have dwindled. I have also noticed that Whole Foods has had to change its pricing on the products that compete directly with products at Trader Joe’s.

I also imagine that our neighborhood, and my mother’s suburban neighborhood with its Wild Oats, are fairly representative of the markets that these two chains serve. I have seen increased competition in that product space in the past several years, and the concern when Whole Foods bought Fresh Fields and Bread & Circus on the east coast did not materialize. So that’s the if-I-believe-in-antitrust-here’s-what-I-say answer. Assuming that I believe in antitrust …

One thought on “Whole Foods-wild Oats Merger: An Antitrust Concern?

  1. (particularly unsurprising to my three very close friends who are antitrust economists)

    Dear, dear, dear. Didn’t your mother ever warn you that people will judge you by your friends?

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