The thugs at the Federal Trade Commission continue to flog Whole Foods for the sin of selling people groceries they want to buy. You see, the FTC thinks — strike that, pretends — that by merging with Wild Oats, Whole Foods would somehow constitute a monopoly. Yet, beyond the inherent flaws of the antitrust mentality, it is obvious to anyone who’s ever been to local grocery stores that Whole Foods doesn’t hold a monopoly.
Yet we can rest easy, in this time of economic trouble, knowing that the FTC is passing along millions of dollars in legal fees to people trying to buy food.
Vincent Carroll wrote up some comments about the case a couple days ago. Ryan Puzycki does a good job explaining the basic errors of antitrust doctrine.
My goal here is simply to point out that Whole Foods in no way holds any monopoly power over the market. In addition to the fact that the huge grocery chains such as King Soopers carry a wide variety of organic products, two markets have expanded in Colorado to compete even more directly with Whole Foods.
Sprouts “offers a large selection of vitamins and supplements, all natural meats, fresh seafood, bins full of bulk foods, an extensive selection of natural and organic grocery items, rBST free milk, imported cheeses, deli meats, old fashioned bakery and more.” The market has two Colorado locations open and plans to open two more.
The Denver Post reported on May 13, 2008, “Natural-food and organic-produce offerings along the Front Range will expand again when Phoenix-based Sprouts Farmer’s Market arrives in the fall.”
Sunflower Farmers Market — which I visited just yesterday — has open nine Colorado stores and plans to open two more. Progressive Grocer reported on January 16, 2008, “Sunflower Farmers Market, a rapidly growing organic and natural supermarket chain based here [in Boulder], said yesterday it plans to grow its store base in Utah and Colorado this year.”
And let us not forget about Vitamin Cottage, yet another natural market, with its 25 Colorado stores and two more on the way.
The only monopoly Colorado consumers need to worry about is the FTC’s monopoly on stupidity and vindictiveness.
And I would add more fundamentally, that even if Whole Foods was the only grocery store selling such products in Colorado, it would still not be a monopoly in the sense that the FTC intends, namely a coercive monopoly. An actual monopoly is defined by the ability of the seller to be able to exclude potential or actual competitors by force. Whole Foods does not have such power. Only the government can grant such monopolies.
I’ve been following this issue closely. Thanks for the post. The Blog Natural-Specialty Foods Memo has been writing alot about the FTC and Whole Foods.
Link: http://www.naturalspecialtyfoodsmemo.blogspot.com