Whole Foods heads to
Capitol Hill to counter Federal Trade Commission’s proposed rules
By Kevin Bogardus
The Hill
Posted: 11/17/08
A national supermarket chain is battling back against
proposed rules by the Federal Trade Commission (FTC) that it says could
jeopardize a roughly $565 million merger with another grocery chain.
Whole Foods Market has hired its first lobbying firm — one with
deep Democratic ties — to raise support in Congress in its fight with the FTC
over the company’s takeover of Wild Oats, an organic food store.
“Whole Foods Market is meeting with members of Congress to
make them aware of FTC procedures that violate the company’s due process rights
as the commission attempts to unwind the year-old Whole Foods-Wild Oats
merger,” said Kate Lowery, a company spokeswoman.
In June 2007, the FTC filed a motion in the U.S. District
Court for the
Whole Foods is also lobbying against new rules proposed by
the FTC that set tighter time limits on adjudication of merger complaints. The
commission said the time and expense to argue before the FTC was having the
effect of discouraging companies from merging.
But in their case, Whole Foods representatives have argued
that the new rules will leave little time for companies to answer FTC
questions, and could therefore jeopardize merger plans.
The FTC lost its original complaint against Whole Foods in
district court but won a reversal on appeal to the U.S. Court of Appeals in the
Whole Foods has hired the Glover Park Group to make its case
on Capitol Hill. Joel Johnson, a former senior aide in the Clinton White House,
and Kim James, once an aide to former Sen. Bob Graham (D-Fla.),
are lobbying for the company. The supermarket chain had already hired Lanny Davis, a fundraiser for Sen. Hillary Rodham Clinton’s
(D-N.Y.) presidential campaign (and a contributor to The Hill’s Pundits Blog),
and Ted Olson, a former solicitor general for the Bush administration, to
represent the company in its legal battles.
There are now about 280 Whole Foods stores across the
country due to its acquisition of more than 70 Wild Oats outlets. Attorneys for
the supermarket argue it has now fully merged with the other store and it would
be catastrophic for its business if the merger were reversed.
Whole Foods employs nearly 54,000 people and reported almost
$8 billion in revenues in 2008.
After winning the appeal, the FTC then scheduled a trial
before an administrative law judge next February. If the judge decides against
Whole Foods, the company can make its case before the full commission and then
appeal the case to appellate court if the merger is denied by the FTC. Concern
about the prospects of the case being kicked back to the FTC has led Whole
Foods to fight the new commission rule relating to mergers.
An FTC spokesman declined to comment on the battle with
Whole Foods because the commission is currently in litigation with the company.
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