Another Bad Omen for Whole Foods…
…Besides Green Peace Lying to Customers about the Environment
This is a piece of info coming from the Drudge Report, a daily habit of mine. Between this and the same CEO saying in conversation that he wanted to eliminate the competition by buying Wild Oats, it isn’t looking too good. Ironically, the one thing Whole Foods has going for them is a Republican administration. In know, that sounds funny, but let me explain my thinking behind this.
It is a good bet that the Republicans may be on their way out – unfortunately. Who is one of the biggest supporters of the Democrat Party? The unions. So why not use a little influence to make sure a non-union store gets bigger and stronger. Mind you, the owners of Whole Foods I am sure donate to the Democratic Party, but they do not take union dues from conservative employees and give them to the Democratic Party, like the unions do. So the amount given to the Democrats from the unions versus Whole Foods is substantially less. And anything to break that stranglehold the unions have in politics would be of long-term benefit to the Republicans. At least that is my take on it.
Anyhew, the first article is from the AP at Breitbart, the second is from Reuters in the Washington Post:
Whole Foods CEO Attacked Rival Online
Jul 12, 2007
DALLAS (AP) - The chief executive of Whole Foods Market Inc. wrote anonymous online attacks against a smaller rival and questioned why anyone would buy its stock, before Whole Foods announced an offer to buy the other company this year.
The postings on Internet financial forums, made under the name "rahodeb," said Wild Oats Markets Inc. stock was overpriced. The statements predicted the company would fall into bankruptcy and then be sold after its stock fell below $5 per share.
In February, Whole Foods announced it would buy Wild Oats for about $565 million, or $18.50 per share.
The company acknowledged that the postings by "rahodeb" were written by CEO John Mackey.
They were made public this week as part of a lawsuit by the Federal Trade Commission to block Whole Foods from buying Wild Oats on antitrust grounds. Regulators say the sale would combine the two largest organic and natural foods retailers and raise prices for consumers by concentrating too much power in one company.
Austin-based Whole Foods defended Mackey's postings, saying they were being taken out of context years later.
"Mr. Mackey made those postings from 1999 to 2006 under an alias to avoid having his comments associated with the company and to avoid others placing too much emphasis on his remarks," Whole Foods said.
The company added that many of Mackey's opinions in the postings "now have far less relevance than when they were written. In addition, like most people, Mr. Mackey's opinion about some things has changed over time."
Whole Foods concluded by saying the comments were Mackey's, not those of the company.
One posting, from January 2005, questioned why anyone would buy shares of Wild Oats at their price then of about $8 each, The Wall Street Journal reported.
"Would Whole Foods buy (Wild Oats)? Almost surely not at current prices," rahodeb wrote. "What would they gain? (Their) locations are too small."
Rahodeb also said Boulder, Colo.-based Wild Oats' management "clearly doesn't know what it is doing." The company, he wrote, "has no value and no future."
Mackey has led an unusually public countercharge to the FTC's attempt to block his company's purchase of Wild Oats. He has said both companies compete in a much larger market because many traditional grocers now sell organic and natural foods.
Mackey used the blog on his company's Web site recently to bash the FTC. He ridiculed the FTC's reasoning that it needed to stop Whole Foods from eliminating a competitor. If that were the case, he said, the FTC should never permit any mergers because they necessarily remove a rival from the marketplace.
The blog broadside by Mackey came after the FTC moved to release sealed documents which quoted the CEO telling Whole Foods directors that buying Wild Oats would help the company "avoid nasty price wars" and block a bigger retailer from building a national natural-foods chain.
The FTC lawsuit is pending in U.S. District Court in
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Whole Foods CEO panned Wild Oats in Web postings
By Peter Kaplan
Reuters
Wednesday, July 11, 2007
WASHINGTON (Reuters) - The chief executive of Whole Foods Market Inc.
Company CEO John Mackey posted messages on a Yahoo! financial forum under the user name "rahodeb," according to a court document filed by the U.S. Federal Trade Commission and postings on Yahoo!
Mackey's messages painted a bright future for Whole Foods, the largest
"The writing is on the wall. The end game is now underway for (Wild Oats) .... Whole Foods is systematically destroying their viability as a business -- market by market, city by city," Mackey wrote in a March 28, 2006 posting.
It was cited by the FTC as part of a lawsuit aimed at blocking Whole Foods' planned $565 million acquisition of Wild Oats on grounds the deal would hobble competition and increase prices to consumers.
"Bankruptcy remains a distinct possibility (for Wild Oats) IMO if the business isn't sold within the next few years," rahodeb said in another March 29, 2006 posting on Yahoo!
Whole Foods confirmed Mackey had made the "rahodeb" postings between 1999 and 2006. It said references to those comments were among millions of documents the company provided to the FTC as part of the agency's antitrust lawsuit.
In a statement, the company said Mackey posted comments under an alias "to avoid having his comments associated with the company and to avoid others placing too much emphasis on his remarks."
"The 'rahodeb' postings are the personal postings of Mr. Mackey and not those of the company," Whole Foods said.
In separate comments posted on Whole Foods' Web site, Mackey said he "posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms."
"The views articulated by rahodeb sometimes represent what I actually believed and sometimes they didn't. Sometimes I simply played 'devil's advocate' for the sheer fun of arguing," Mackey said on the company Web site.
"All of rahodeb's postings also need to be understood in the context of the time that they were written. Because the competitive market has evolved so much in the last 5 years, older postings mean far less today than they did when they were written," Mackey wrote.
Whole Foods announced plans to buy Wild Oats in February. The companies have said the merger should be allowed to proceed in light of fierce competition in the overall grocery business.
But in some postings, rahodeb downplayed other supermarkets as potential competitors that could hurt Whole Foods.
"If you are waiting for Trader Joe's or Wegmans to slow down the Whole Foods express train you're going to be waiting the rest of your life. It ain't (going to) happen," rahodeb said in a September 28, 2005 posting in response to another participant.
"You say that competition is increasing against Whole Foods, but continue to ignore the fact that your so-called competition isn't hurting them," rahodeb wrote in an October 3 2005 posting.
The FTC's complaint was filed June 6, but portions were initially kept under seal. The FTC released the document late Tuesday.
On his personal blog, Mackey has accused the FTC of distorting his private statements in order to portray him as excessively aggressive and bent on eliminating healthy competition.
