Thursday, December 4, 2008

The Natural Foods Game Gets Ugly

One doesn't normally associate the natural foods industry with the kind of brutal business tactics one expects in, say, the software industry or the financial

Posted By on Thu, Dec 4, 2008 at 7:26 AM

 

One doesn't normally associate the natural foods industry with the kind of brutal business tactics one expects in, say, the software industry or the financial sector. But there's a real rough-and-tumble going on now between Whole Foods and its tiny competitor, New Seasons Markets.


 

Whole Foods, a Texas-based outfit that operates 270 stores and been described as "the Microsoft of the natural foods industry," merged with Whole Foods in 2007, but that merger is under challenge by the Federal Trade Commission on antitrust grounds.

To defend itself against the challenge, Whole Foods claims it needs to subpoena the business records of New Seasons, which operates nine stores in the Portland area. New Seasons is afraid Whole Foods will use the information to develop a strategy to put them out of business.

Whole Foods wants "to try and force us to give them copies of some of our most confidential financial records - for instance what our sales are, week by week, at each of our stores," writes New Seasons CEO Brian Rohter on his company blog. "They've also demanded all of our files that detail our strategic plans, all of our marketing plans and all of our studies about where we are considering opening new stores."

Rohter says his company is fighting the subpoena but has been told by its lawyers that there's a chance it could lose. If it loses and refuses to turn over the information, it could be held in contempt of court and fined - or Rohter could even end up in jail.

"Obama may be holding daily press conferences, but we still live in the Age of Bush, where Whole Foods might actually succeed in using an antitrust investigation against itself as a tool to eliminate another, unrelated competitor," blogs "nothstine" on Loaded Orygun. "If you've got a New Seasons in your area, show 'em some love. I particularly recommend the salad/wok bar."

Leslie Carlson on the BlueOregon blog goes futher, calling for a boycott of Whole Foods: "In the past, I have occasionally stopped into Whole Foods. That ends today. Threaten my favorite locally-owned grocery store, and I promise to never darken your door again."

That's all well and good for Portlanders, but we don't have a New Seasons market in Bend. So where are we supposed to go for our organic arugula and hemp handbags?

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