The Bully on the Block, aka Whole Foods
New Seasons is a beloved Portland Institution it is our fantastic, locally-sourced very eco- and neighborhood-friendly grocery store. They buy from local farmers and producers first whenever possible and have established healthy LOCAL partnerships that provide consumers with the best quality products with a significantly reduced carbon footprint.
Here in Portland Whole Foods is generally considered the bully on the block, and they are now going after New Seasons in the guise of defending themselves against a lawsuit that is a direct result of how they how acquired Wild Oats.
New Seasons: We’re Just Trying to Mind Our Own (Local) Business
Why is this sort of nasty corporate behavior OK for Whole Foods? Particularly given their “earth-friendly, we are the good guys” marketing message.
While I realize in some parts of the country, Whole Foods seems to be the only option for certain types of organic vegetables and meats — I strongly urge everyone to take a look at your local co-ops or family owned grocery stores as an alternative to Whole Foods.
In these troubled economic types it is especially important that we help our local businesses stay in business.
Here is a link to a good round-up of local grocery co-ops throughout the United States.
[...] the rest of the article via New Seasons. Here’s the commentary that tipped me off to this latest, ungreatest development. While I personally admire John Mackey [...]
Hey, Whole Foods Market here. Wanted to share our point of view with your readers. We are reading and listening to your concerns so we hope you’ll be open to reading ours.
The last year has been something of a nightmare for the administrative team members here who have been jumping through hoops to meet requests from the FTC. While our customers, our competitors’ customers, industry insiders and merger experts all seem to agree that customers have not been adversely affected by the Whole Foods Market/Wild Oats merger, the FTC continues to press their case forward.
While we would love to see this whole issue go away, we have no option but to defend ourselves against the FTC’s ongoing effort. We know that New Seasons and many other fine natural foods stores are serving their customers well and that those customers, like ours, continue to have ample choices even after our merger with Wild Oats. Since the FTC insists that we have harmed these markets, we have to defend ourselves by showing that these markets are doing well. Part of our defense is based on gathering information from third parties through subpoenas, mostly from competing retailers but also from some vendors who supply Whole Foods Market.
We have not singled out New Seasons. Rather they are one of 96 companies (stores and vendors) that our outside legal counsel has subpoenaed. Why so many? The FTC has targeted Whole Foods Market in 29 different markets, and we must now defend against the claim that we do not face substantial competition from other supermarkets in all of these markets.
If we could defend ourselves without gathering information from competitors, we would. We don’t appreciate being put into this situation by the FTC. This is absolutely NOT an attempt to look into competitors’ information. In fact, no one inside Whole Foods Market will look at this information at all – only our outside counsel and their consultants are authorized to see the information gathered due to the FTC’s protective order. For those non-lawyers reading this, subpoenas and protective orders are a standard part of litigation practiced in virtually every antitrust case in the United States. The protective order prohibits any of this information from being shared with any Whole Foods Market team member, including in-house legal counsel. And while we understand that some of you will have trouble trusting the government system of protective orders, we give you our word that Whole Foods Market will not breach that trust.
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 know the New Seasons and Whole Foods Market customers are a dedicated, caring group of people. We thank you for your concern for your local stores. Know that while we may not always see things eye to eye, we are working toward the same goal – making the world a better place through food choices.
(Posted by Whole Foods Market team member Paige Brady on behalf of our leadership team.)
Brian Rohter of New Seasons responded to Paige on his blog as follows:
“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.”
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