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 …