Monday, August 20, 2007

To the FTC: Organic Competition Works Well Without You 

Filed As:  Economic principlesGeneral

Demand is rising for organic foods and products. Traditional grocery stores are increasing their organic selection. Consumers are benefiting from this naturally occurring cycle. Thus, one wonders: What is the real motive behind the FTC’s groundless attack on the Whole Foods and Wild Oats merger?

Today the FTC filed an appeal of a judge’s recent decision that would allow a union of the two companies. The FTC claims the merger would reduce competition, raise prices and thereby harm consumers. Oddly, the Commission does not recognize traditional grocery stores as competitors.

The FTC apparently missed last week’s story: On August 8, Kroger -- the country’s largest traditional grocer -- launched a major push to expand its in-store organic food offerings. According to an Associated Press article, Kroger expects to double its private organic line of foods by the end of 2007.

Moreover, the AP reports, “Kroger, Wal-Mart Stores Inc. and other major grocery sellers have been increasing selections of organic and natural foods in response to rising demand and the growth of chains such as Whole Foods Market Inc. and Wild Oats Markets Inc.”

A simple review of the Organic Trade Association website alone would demonstrate that the FTC’s arguments are without merit. The OTA’s 2006 Manufacturer Survey might be a good place for FTC commissioners to start -- assuming they don't habor ulterior motives.

 

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