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Whole Foods Vrs. New Seasons Lawsuits Filed

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Because of their legal dispute with the FTC, Whole Foods can try and force us to give them copies of some of our most confidential financial records

There are some things I like about Whole Foods. They carry an abundance of healthy, mostly organic foods, and are close to my house. However, if I had a choice, I’d pick New Seasons almost every time. Why? I like their philosophy, their service, and their wine selection, not to mention they are a local chain. Even better, if I want to buy something that is less than healthy, they have some of that too. However, things have changed, and until Whole Foods backs down and quit harassing New Seasons, I won’t be returning to their store.

Competition is a healthy thing; I’m all for it. However, this item by Brian Rohter from the New Seasons blog caught my eye. With permission, I’ve reprinted it in entirety. It’s worth the time it takes to read.

You may have heard that New Seasons Market has found ourselves caught in the crossfire of an ongoing legal dispute between the Federal Trade Commission (FTC) and Whole Foods Market. The disagreement has to do with whether or not the Whole Foods merger with Wild Oats should be “allowed to proceed”. Yes, we know that seems like a crazy thing to be fighting about since all the Wild Oats stores that were around here have already been closed or turned into Whole Foods stores, but neither the federal government or Whole Foods asked us for our opinion.

You also are probably trying to figure out what this could possibly have to do with us. That’s a great question. Since we’ve been minding our own (local) business and have never expressed an opinion one way or the other about this merger, we were wondering the same thing.

As it turns out, because of their legal dispute with the FTC, Whole Foods has an opportunity 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. 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. Below is a partial list of what they’re trying to get (quoted directly from the subpoena):

3. All documents relating to Whole Food’s acquisition of Wild Oats, including documents discussing the effect of the merger on you.

4. All documents discussing competition with Whole Foods or Wild Oats, including responses by you to a new Whole Foods or Wild Oats store and responses by you to prices, product selection, quality, or services at Whole Foods or Wild Oats stores.

5. All market studies, strategic plans or competition analyses relating to competition in each Geographic Area, including documents discussing market shares.

6. All market studies, strategic plans or competition analyses relating to the sale of natural and organic products, including the sale of natural and organic products in your stores.

7. All documents relating to your plans to increase the shelf space at your stores allocated to natural and organic products, the number of natural and organic products sold in your stores, or the sales of natural or organic products in your stores.

8. All documents discussing your plans to renovate or improve your stores to sell additional natural and organic products or to open stores emphasizing natural and organic products.

9. Provide documents sufficient to show, or in the alternative submit a spread sheet showing: (a) the store name and address of each of your stores separately in each Geographic Area; and (b) for each store provide the total weekly sales for each week since January 1, 2006 to the current date.

I have to believe that any reasonable person would agree that it’s really over the top for Whole Foods to be asking for this information, especially since we have nothing to do with their lawsuit. It takes away the level playing field, creates an unnecessary risk for our business and has the potential to have a negative impact on our network of local growers, ranchers and suppliers. It also could permanently damage the fragile regional food system that we’ve been working to create and, in the end, could reduce options for Portlanders who choose to shop at locally owned stores.

New Seasons Market is a small, locally owned company that competes against large, multi-national chains including Whole Foods. Whole Foods has about 270 stores in cities all over North America and in England. We have 9 stores in the Portland area. Allowing Whole Foods to look through all of our private information about how we operate and what our plans are for the future unfairly adds to their already large size and financial advantage. We’ve been able to build a successful local business being David against their Goliath, and we’re happy to keep doing that, but we do object to having one hand tied behind our back.

Whole Foods says that we should give our information to their lawyers and they claim the lawyers won’t let anyone else in the organization see them. That’s like trusting the fox to guard the henhouse – and we don’t have any faith it’s going to work like that.

I’m sorry to say this, but some of the people at Whole Foods have a history of less than stellar behavior when it comes to competing fairly. There are two obvious examples of this. First, last year, their CEO John Mackey was caught posting derogatory information online about Wild Oats, using a made up screen name. Here’s a New York Times story about that.

Second, during the first round of this law suit last year, the FTC released a bunch of e-mails that some Whole Foods executives had sent over the previous few years. You can find the entire (really lengthy) FTC report here, but just to give you a flavor of it, below are a few excerpts of Whole Foods’ comments in regards to Wild Oats:

“Wild Oats needs to be removed from the playing field…”

“…[m]y goal is simple – I want to crush them and am willing to spend a lot of money in the process.”

“…elimination of a competitor in the marketplace, competition for sites, competition for acquisitions, and operational economies of scale. We become the Microsoft of the natural foods industry.”

Yikes!

This case has been going on for about 18 months. This is the second time Whole Foods has tried to get access to our records. Last year they also filed a motion to try and get our financial records turned over to them; not just to their “outside” lawyers, but to executives who are on the Whole Foods payroll and work in the Whole Foods corporate offices in Austin, Texas. What possible reason do we have to believe they won’t just try and do that again?

When I received this subpoena my immediate reaction was disbelief. I was confident there was no way our legal system would force us to give our private business records to one of our competitors. It looks like I may have been wrong about that. We’re fighting this (and running up whopping legal bills in the process) and here’s a copy of the motion we filed [link no longer valid] with the Federal Trade Commission. Amazingly, our lawyers tell us that there’s a chance we’ll lose the case and will be required to turn over the information.

Of course I asked what would happen if we refused. The answer was that we could be held in contempt of court and subject to large fines or even jail time. In case anyone is planning on visiting me there, I really love doing the daily Oregonian crossword and also M&M Peanuts. (My wife Eileen doesn’t think this is very funny.)

We’ll keep you posted on this as the situation evolves.

Here is the response I received this evening from Whole Foods:

Hey, Whole Foods Market here. Wanted to share our point of view with your readers. We are reading and listening to your concerns so we hope you’ll be open to reading ours.

The last year has been something of a nightmare for the administrative team members here who have been jumping through hoops to meet requests from the FTC. While our customers, our competitors’ customers, industry insiders and merger experts all seem to agree that customers have not been adversely affected by the Whole Foods Market/Wild Oats merger, the FTC continues to press their case forward.

While we would love to see this whole issue go away, we have no option but to defend ourselves against the FTC’s ongoing effort. We know that New Seasons and many other fine natural foods stores are serving their customers well and that those customers, like ours, continue to have ample choices even after our merger with Wild Oats. Since the FTC insists that we have harmed these markets, we have to defend ourselves by showing that these markets are doing well. Part of our defense is based on gathering information from third parties through subpoenas, mostly from competing retailers but also from some vendors who supply Whole Foods Market.

We have not singled out New Seasons. Rather they are one of 96 companies (stores and vendors) that our outside legal counsel has subpoenaed. Why so many? The FTC has targeted Whole Foods Market in 29 different markets, and we must now defend against the claim that we do not face substantial competition from other supermarkets in all of these markets.

If we could defend ourselves without gathering information from competitors, we would. We don’t appreciate being put into this situation by the FTC. This is absolutely NOT an attempt to look into competitors’ information. In fact, no one inside Whole Foods Market will look at this information at all – only our outside counsel and their consultants are authorized to see the information gathered due to the FTC’s protective order. For those non-lawyers reading this, subpoenas and protective orders are a standard part of litigation practiced in virtually every antitrust case in the United States. The protective order prohibits any of this information from being shared with any Whole Foods Market team member, including in-house legal counsel. And while we understand that some of you will have trouble trusting the government system of protective orders, we give you our word that Whole Foods Market will not breach that trust.

We find it very unfortunate that the FTC’s ongoing pursuit to affect our merger (which was consummated more than a year ago) continues to be burdensome to Whole Foods Market, other stores like New Seasons, and U.S. taxpayers. We know the New Seasons and Whole Foods Market customers are a dedicated, caring group of people. We thank you for your concern for your local stores. Know that while we may not always see things eye to eye, we are working toward the same goal – making the world a better place through food choices.

(Posted by Whole Foods Market team member Paige Brady on behalf of our leadership team.)

Note: IP address verified as coming from WFM


New Seasons Responds:

Sorry, but they’re leaving quite a bit out of that statement.

Just take a look at the history of Whole Foods actions. Last year, in the first round of this dispute, private information was subpoenaed from a bunch of grocery stores. All of those stores, including us, received the same promises of confidentiality-“only outside counsel will see these records, no employees of Whole Foods will ever see them, etc., etc”.

Then in the middle of that process, Whole Foods went to court to try to get all those same documents and files sent to their corporate headquarters in Austin, Texas so their in house counsel (the same one they’re talking about above that “will never see the private files”) could look through them. Whole Foods position was, even though this attorney was an employee of Whole Foods and was on their “Leadership Team”, it was okay for her to see everyone else’s private data because she wasn’t engaged in “competitive decision making”.

Sound unbelievable? You can see for yourself at the FTC website. Why should we believe they won’t try that again?

And those “consultants” that Paige refers to above? Once they’ve looked through our information they’re not going to “unlearn” it. The very nature of their job means they carry things they’ve learned from one job to another. Will they ever work for Whole Foods again?

And that protective order? There’s no real penalty for violating it.

In their press release Whole Foods says, “It is important to understand that no competitor will be disadvantaged by complying with the subpoena . . .”

Sorry again, but that’s incorrect. Aside from the issues we’ve already talked about, our lawyers are telling us that it may cost us between $250,000 and $500,000 to comply with all the requirements of the Whole Foods subpoena. That may not be a huge amount of money to a company the size of Whole Foods, but to us it is a fortune.

So as much as we’d like to just say, “No worries. Let’s all just get along”, in this instance we don’t see how we can do that. Whole Foods has the ability to make this problem go away. We hope they do.

Oregon Live has been digging further and has some interesting points:

Not all of Whole Foods’ competitors in Portland received subpoenas. Zupan’s Market, which has four Portland-area stores, did not receive one.

“As a business owner, I would never want to give up my proprietary information,” said owner Mike Zupan, who said he personally didn’t mind Whole Foods’ purchase of Wild Oats. “I don’t feel threatened. Consumers here have a choice, and any time you have a large corporation come in, it gives the independents a lot of opportunity.”

Reader Interactions

Comments

  2. MyNextMeal says

    Ugh. This makes me want to not patronize Whole Foods (WF) ever again even though their locations are more convenient to me. I patronize both New Seasons and WF and am happy that I have multiple choices to get quality products. I now believe I will go out of my way to avoid Whole Foods – even if the subpoena is overturned (or whatever the correct legalese is).

  3. jackc says

    I shop both. But this smacks of a bit of “playing for sympathy” by New Seasons where, incidentally, I have been overcharged at least half a dozen times. When you are involved in a business there are lawsuits, certainly Mr. Rohter who has made millions at New Seasons knows that and I’ll bet he knows that in lawsuits you ask for the world and usually settle for New Hampshire, a smallish part. (edited by FD). Another undisclosed part is that the money from Wild Oats, and the foundation for their stores here, was the money that started New Seasons. Just seems there are a lot of possibilities and I personally won’t start boycotting anyone until the smoke settles and we know the real story. “Going to jail?” That is clearly a “poor little us” ploy for sympathy, no one is jailing Mr. Rohter and I’m reasonably certain he can scrape up enough money to hire an attorney to protect his empire.

  4. DeepCerulean says

    Anyone have any idea if Fred Meyer and/or Safeway got similar subpoenas? They both have been (signifcantly?) increasing their organic offerings lately. It would be interesting to know if NSM is the only store with the target on its back…

  5. Pearl District says

    Until reading this today, I spent more than $600 per month at Whole Foods. I will never set foot in that store again. This aggressive behavior conflicts with the image Whole Foods likes to promote.

  6. polloelastico says

    Not surprising, in the least. The founder of Whole Foods has made no attempt to hide his libertarian, free market jihadist leanings. And all that past Internet sock-puppetry revealed him to be an egoist and a raving nutball.

  8. nancy says

    I am a 100% free marketeer, but this is not what he’s espousing; he’s not making things better for his customers and letting them decide where to spend their dollars; he’s hiring a battery of lawyers in an attempt to tilt the playing field his way. How craven and unimaginative. Ditto the sock-puppetry. Anyway, I won’t do business with people who, in actuality, are impeding the free market by throwing gum in the works. B’bye, Whole Foods.

  9. Joisey says

    If New Seasons were smart, they’d have a team creating an outrageously bad “updated marketing strategy/plan” to turn over to the Whole Foods Gestapo.

    I’ve never really shopped at “Whole Paycheck” and this does nothing to make me give them any future business.

  10. nancy says

    Hah! Yes, sort of like, “In an effort to keep things as back-the-the-land as possible, do away with automated cash registers and have gerbils chew off people’s receipts” and “More dancing girls!”

  11. Cuisine Bonne Femme says

    The business practices of Whole Foods are pretty disgusting at times. This is a perfect case in point. Can’t say I will boycott them completely (in some places like New Orleans, sadly, Whole Foods is the only place of its kind), but I will continue to hardly ever shop there.

    A really interesting thing to do would to be to start an email campaign to Whole Foods calling them out on their a**hattery. I’ll do some digging and come up with contact contact names there. It could be bad publicity for Whole Foods. I’d also like to see mainstream media pick up on this. It sounds like something the NY Times or Willamette Week would be all over.

  12. OneTart says

    As co-owner of a small business, I think the world of New Seasons. They are as respectful and nice to their vendors as they are to their customers. It amazes us every time we make a delivery. I wish them all the freakin’ luck in the world in fighting this.

  13. nepdxer says

    If ever a boycott of Whole Foods was deserved it certainly is now.

    I won’t take the wimpy “Can’t say I will boycott them completely,” line.

    I won’t set foot in Whole Foods.
    Period.

    Want to start lobbying? Write to these national PR people for Whole Foods.
    Let’s barrage them.

    National Contacts

    Ashley Hawkins
    Ashley.Hawkins@wholefoods.com
    512.542.0381

    Cathy Cochran-Lewis
    Cathy.CochranLewis@wholefoods.com
    512.542.0380

    Kate Lowery
    Kate.Lowery@wholefoods.com
    512.542.0390

    Libba Letton
    Libba.Letton@wholefoods.com
    512.542.3031

  14. swpdx says

    Jackc the money to start new seasons came from selling natures to gnc who was going to take it national. Than gnc ran into money issues and sold natures to wild oats. At that point new seasons was started by the people who owned natures.

  15. cupsncakes says

    I loathe new seasons, much more than whole foods. the “david and goliath” analogy is absurd, as they are no goddam david. ugh!

  16. Jason Wax says

    This has been going on for at least 18 months. I recall seeing another NSM Motion to Quash sometime in July or August 2007. I had no idea this was still going on. I think sending some indignant letters to Whole Foods is a great idea!

    Here’s the contact information for the media contact for the Pacific NW region:
    Vicki Foley
    Vicki.Foley@wholefoods.com
    604.739.6640 x210

  17. Zaphod says

    I’m literally a block away from WholePaycheck(tm) previously Wild Oats. It’s a bugger that they have to play dirty. I like New Season’s wayyy more. Now that I’ve heard this, I’ll shift to NS for all but the random forgotten ingredient.

  18. rmcaluma says

    “$600 per month”……………on food!………………..HOLY S**T!!!!!! That’s rent! They must have, like, 10 kids!

  19. nancy says

    I probably spend close to $600 a month on food for a household of three, albeit with many visiting teenagers, a.k.a. “the locusts.”

  20. Erin says

    Wow, that’s so lame. I’ll never shop at Whole Foods again, and I’ll tell my friends and family to do the same.
    I did occasionally shop there, since my old Wild Oats was taken over (same for a few others I know), but now that this has come to light, screw them.

    And we’re just a couple, but we probably spend at least $300 a month on food, wine, and all our other sundry groceries. That organic stuff is expensive!

  21. DinahDavis says

    I spend $600/month on groceries for the two of us (we do a lot of cooking, and pack lunches to work) and enjoy entertaining, so with the price of groceries, and not just organic ones, we spend $$$.

    It’s easy to rack up $150 every week…

  22. OneTart says

    Hey Cupsncakes… just curious why you don’t like New Seasons. Did you know that they give 20% of their profits back to employees? Pay full insurance for all full-time employees and nearly all (80%, I think) insurance costs for the families of full-time employees? 50% of insurance for employees who work as little as one day per week? Sponsor classes on how to buy and finance a mortgage for any employee who is interested? These are just a few of the reasons I still see them as a “David” of sorts. I could go on and on about other practices I’ve seen there. If Whole Foods was doing any of those things, there would be a press release every two seconds. Maybe I’ve consumed the kool-aid, but these folks seem as though they really are concerned about the well-being of their employees and community. FYI, my sister used to work for New Seasons, which is why I’ve heard about some of these practices… not because they’ve flaunted their efforts (the way it feels every time Whole Foods performs some act of “kindness.”)

  23. Rick Hamell says

    I have not been a fan of Whole Foods for a long time. I’m not impressed with the brands they do have on the shelf or the over all lack of choices between brands that they really have in their stores.

    I was severely disappointed when they took over Wild Oats, but mildly happy when they built the Tannasborne store. But doing something like this is just obscene. I have to wonder if some of the even smaller stores such as that food co-op down on Clinton got the same request.

    If Whole Foods drives my Cedar Hills New Seasons store to close… I do not know what I will do. My choices from then on will be Fred Meyers or Winco. Neither of which have anything close to what I’d call many organic choices.

  25. nancy says

    I have written to the PR folks stating my displeasure, and part of every conversation I am having today includes, “Don’t go to Whole Foods, and here’s why.” As I wrote on my blog, it’s not (only) the craven and small-minded business practices; I expect businesses to, when given/taking the opportunity, slit one another’s throats. It’s that their time, effort and money is devoted to making it worse for the consumer. Competition is good; if WH were pumping millions into making their stores ga-ga great, better in every way than New Seasons, well, so be it; they’d get my dollars. But they’re not; they want (per their goal of becoming “the Microsoft of the natural foods industry”) to saddle us with their version of Vista. No thanks.
    There’s a very simple way to keep New Seasons in business: shop there. Don’t shop at Whole Foods. Hit them in the pocketbook.
    Oh, and also: not only am I doing this as a personal consumer, but as a small business owner who routinely spends about $300 a month at Whole Foods. No mas. Not one more penny.

  26. traci laurent says

    i like to support our local business as much as possible. i also believe a little competition is healthy in such business…

  27. zumpie says

    OneTart, don’t forget New Seasons also actually pays their employees a living wage! Cashiers can make as much as $15 per hour—not bad at all! Conversely Whole Foods employes “progressive” hiring and management techniques that basically make it a working nightmare.

    One of these is that for hourly new hires, everyone in that department votes on whether or not they get to stay after a month. I realize this sounds great, but in reality it turns the workplace into highschool, complete with bullying cliques and its own popularity contest. No doubt those with seniority wield an obscene amount of power, with everyone below them kissing their butts just to keep their jobs. You already have to do that with your boss, you shouldn’t have to do it with your co-workers. Plus someone with actual new ideas might be perceived as a threat and voted out.

    The only positive I’ll give Whole Foods, 2 1/2 years ago I worked across the street from them—-they made a yummy smoked mozzarella and Roasted Veggie pizza. But I’ll definitely spend my $$$ elsewhere

  28. Seth says

    Have you tried demanding that Whole Foods provide you with the same information they’re demanding? It seems only fair.

    If they claim their lawyers will be the only ones to see it, force them to post a large cash bond should that prove untrue, and to make the statement under penalty of perjury. Require that their lawyers certify, still under penalty of perjury, that nobody else has had access to the data in any way shape or form, every week.

    Then get their lawyers disbarred for violating their oaths.

  30. Hunter says

    You’re never going to shop or step foot in Whole Foods because of this?! Well I hate to break it to you but you’re gonna be boycotting every company you’ve ever heard of. This is actually pretty common. The records, if found to be relevant and not trade secrets, will be produced to a judge with a protective/confidentiality order. There seems to be a little too much hyperbole here. And I agree, NS is looking to play the sympathy card here. If the records aren’t relevant, they won’t be produced.

  31. nancy says

    Someone posted on my blog something similar to the above, stating this is business as usual, so be it.

    If this is pretty common for “every company you’ve ever heard of,” I’m curious: amongst business owners here, who’s engaged in this? I’ll start: Nay.

  34. Kevin Scaldeferri says

    @nancy I’m going to guess that you’ve never been involved in similar litigation as a business owner.

    WF is in the position of having to show that the the merger does not create a monopoly presence in the this space. The way to do that is to demonstrate that there is vigorous competition. The items requested in the subpoena sound very much like they are meant to support the argument that there is still significant competition in the organic / natural foods marketplace. Yeah, it’s rather over the top, but as another person stated, the way with these things is that you ask for the world and get a little piece of it all in the end.

    Oh, and I’m pretty sure all the other grocery stores got this too. The language is much more appropriate to mainstream supermarkets than to a store like NS that has always been devoted to natural/organic.

  35. nancy says

    As my blog readers know: I like listening to both sides. Ergo: though I still think WH CEO’s previous sock-puppetry asinine (really, what a weenie), nor do I appreciate the “crushing” and “elimination” of competitors (liking as I do, choice), I can see how the New Seasons post, charming and “aw, shucks” as it is, is a bit of a ploy for sympathy, and will recalibrate my indignation accordingly.

  36. polloelastico says

    “Unions as they evolved in the United States became very adversarial, untrusting, and opposed to the success and prosperity of the business. This is my major objection to unions today — they harm the flourishing of the business for all the stakeholders. Instead of cooperation between stakeholders, they focus on competition between management and labor. Instead of embracing the notion of the ‘expanding pie’ vision of capitalism — more for everyone, or win-win — they frequently embrace the zero-sum philosophy of win-lose.”
    — Whole Foods CEO John Mackey

    ===========================

    How…ironic.

  37. djonn says

    Having looked at both linked documents — the subpoena and NS’s response:

    Kevin and Hunter are correct that the subpoena is standard civil-lawyer strategy: ask for the earth, the moon, and the stars, and expect to eventually get a handful of asteroids, a couple of continents, and maybe an ocean if you’re lucky. I think Kevin’s also right to note that the whole thing looks like boilerplate language, and that most of the locally active supermarket groups will have been served. (It would be interesting to know whether Food Front was targeted with one of these….)

    I think New Seasons makes good arguments in its motion to quash; while Kevin’s arguably right that New Seasons’ example is directly relevant to WF’s theory that there’s still competition in the marketplace, NS is entirely correct that (a) the practical effect of handing over all that information is likely to be inherently anti-competitive, and (b) that the rules as presently drafted don’t impose nearly enough sanctions or penalties for leakage of NS’s confidential data. [It is also, I think, highly relevant that NS is privately held; that’s a different situation than you’d have dealing with a publicly traded company.]

    If I read the subpoena correctly, the lawyers handling this are outside counsel (i.e. not Whole Foods’ employees), which is also standard practice. While I am no great fan of either big-gun trial lawyers or Whole Foods in general, I’d be reluctant to mount a boycott of Whole Foods based purely on their outside lawyers’ tactics; this is a little like blaming Safeway for the way chickens are treated by egg producers. There’s a connection, yes, but not so close a connection that one should automatically presume malevolence by association.

    Now, are NS and Brian Rohter engaging in PR “spin” by posting the blog entry? Of course they are — and New Seasons’ business position is a bit more complex than the post would make it appear. By comparison to Whole Foods or Safeway, NS is a small business…but in absolute terms, it’s a major player in the local market. They have more stores locally than Trader Joe’s or Winco (or, for that matter, WF itself) and are continuing to expand. The idea that their presence in the market demonstrates that WF still has viable competition can’t be dismissed out of hand.

    Ultimately, I think New Seasons has both the better legal argument and the stronger business model, although neither company is free of warts (a friend’s spouse recently lost a good job at NS via what I’m told was really slimy intra-departmental manipulation; WF apparently isn’t the only workplace where high school politics thrive).

    Will I boycott WF? Doubtful — but then again, I walk through a WF store maybe twice a year at best, and rarely if ever buy anything. The Kid Brother gets his Thanksgiving turkeys there, but he’s in greater Los Angeles where NS isn’t really a viable option….

  38. Paige Brady says

    Hey, Whole Foods Market here. Wanted to share our point of view with your readers. We are reading and listening to your concerns so we hope you’ll be open to reading ours.

    The last year has been something of a nightmare for the administrative team members here who have been jumping through hoops to meet requests from the FTC. While our customers, our competitors’ customers, industry insiders and merger experts all seem to agree that customers have not been adversely affected by the Whole Foods Market/Wild Oats merger, the FTC continues to press their case forward.

    While we would love to see this whole issue go away, we have no option but to defend ourselves against the FTC’s ongoing effort. We know that New Seasons and many other fine natural foods stores are serving their customers well and that those customers, like ours, continue to have ample choices even after our merger with Wild Oats. Since the FTC insists that we have harmed these markets, we have to defend ourselves by showing that these markets are doing well. Part of our defense is based on gathering information from third parties through subpoenas, mostly from competing retailers but also from some vendors who supply Whole Foods Market.

    We have not singled out New Seasons. Rather they are one of 96 companies (stores and vendors) that our outside legal counsel has subpoenaed. Why so many? The FTC has targeted Whole Foods Market in 29 different markets, and we must now defend against the claim that we do not face substantial competition from other supermarkets in all of these markets.

    If we could defend ourselves without gathering information from competitors, we would. We don’t appreciate being put into this situation by the FTC. This is absolutely NOT an attempt to look into competitors’ information. In fact, no one inside Whole Foods Market will look at this information at all – only our outside counsel and their consultants are authorized to see the information gathered due to the FTC’s protective order. For those non-lawyers reading this, subpoenas and protective orders are a standard part of litigation practiced in virtually every antitrust case in the United States. The protective order prohibits any of this information from being shared with any Whole Foods Market team member, including in-house legal counsel. And while we understand that some of you will have trouble trusting the government system of protective orders, we give you our word that Whole Foods Market will not breach that trust.

    We find it very unfortunate that the FTC’s ongoing pursuit to affect our merger (which was consummated more than a year ago) continues to be burdensome to Whole Foods Market, other stores like New Seasons, and U.S. taxpayers. We know the New Seasons and Whole Foods Market customers are a dedicated, caring group of people. We thank you for your concern for your local stores. Know that while we may not always see things eye to eye, we are working toward the same goal – making the world a better place through food choices.

    (Posted by Whole Foods Market team member Paige Brady on behalf of our leadership team.)

  39. Food Dude says

    I’ve added a poll in the sidebar so you can all give your opinions on how this will affect your likelihood of shopping at Whole Foods.

  40. Brian Rohter says

    Brian Rohter from New Seasons here. Since Paige Brady posted this same comment on our blog I thought I’d share our response to it with you here. Here’s what I said:

    Paige Brady from the Whole Foods corporate office has posted here on our blog explaining their perspective on this situation. We appreciate her gumption and are thankful for her kind words about our company and our customers.

    Also, Whole Foods just put out a press release, saying most of the same things as Paige and assuring us that we have nothing to fear if we’re forced to turn over all of our private information to them. I have to say that I disagree with their point of view.

    Whole Foods says, “ . . . all responses are subject to an FTC-issued protective order. The protective order precludes any of this information from being shared with any WFM employee, including in-house counsel. Only outside counsel and their consultants can see this information.”

    Sorry, but they’re leaving quite a bit out of that statement.

    Just take a look at the history of Whole Foods actions. Last year, in the first round of this dispute, private information was subpoenaed from a bunch of grocery stores. All of those stores, including us, received the same promises of confidentiality—“only outside counsel will see these records, no employees of Whole Foods will ever see them, etc., etc”.

    Then in the middle of that process, Whole Foods went to court to try to get all those same documents and files sent to their corporate headquarters in Austin, Texas so their in house counsel (the same one they’re talking about above that “will never see the private files”) could look through them. Whole Foods position was, even though this attorney was an employee of Whole Foods and was on their “Leadership Team”, it was okay for her to see everyone else’s private data because she wasn’t engaged in “competitive decision making”.

    Sound unbelievable? You can see for yourself at the FTC website. The link is http://www.ftc.gov/os/caselist/0710114/070620response.pdf You’ll find it on page 3. Why should we believe they won’t try that again?

    And those “consultants” that Paige refers to above? Once they’ve looked through our information they’re not going to “unlearn” it. The very nature of their job means they carry things they’ve learned from one job to another. Will they ever work for Whole Foods again?

    And that protective order? There’s no real penalty for violating it.

    In their press release Whole Foods says, “It is important to understand that no competitor will be disadvantaged by complying with the subpoena . . .”

    Sorry again, but that’s incorrect. Aside from the issues we’ve already talked about, our lawyers are telling us that it may cost us between $250,000 and $500,000 to comply with all the requirements of the Whole Foods subpoena. That may not be a huge amount of money to a company the size of Whole Foods, but to us it is a fortune.

    So as much as we’d like to just say, “No worries. Let’s all just get along”, in this instance we don’t see how we can do that. Whole Foods has the ability to make this problem go away. We hope they do.

  41. chefken says

    For me, though I find WF’s actions pretty over the top and typical of a large corporation, it’s a pretty moot point. I choose to shop at stores like New Season’s and others because they’re locally owned. It’s not a boycott of one place if you choose to shop at another. Whole Foods is a mega-corporation that swoops into local markets, does what it can to dominate those markets, then takes the profits out of that market to their shareholders, wherever they may be. They do “create” jobs, but those jobs would just be “created” by the other stores that fill their market shares. New Seasons and other local purveyors take their profits and keep them in the community. I’ll choose to patronize companies like that every time.

    My wife subscribes to the idea that by law, the majority of the shareholders of a company should have to reside withing 100 miles of the corporation’s home. Think of how that would change things! It would be in the interest of companies to invest their profits where their shareholders – and their workers live. They’d never move to find cheaper labor. All rather utopian, but has its merits, IMO.

  42. chefken says

    Oh, and Nancy, as a business owner I can’t see myself engaging in this sort of nonsense. For one thing, I’ve got to live in the community in which I do business. That’s usually not true of the major shareholders of companies like WF.

  43. Cuisine Bonne Femme says

    Ms Brady, in all due respect, this is what gets my goat about Whole Foods and is the clincher: (From New Seasons’ above comment) “In their press release Whole Foods says, “It is important to understand that no competitor will be disadvantaged by complying with the subpoena . . .”

    Sorry again, but that’s incorrect. Aside from the issues we’ve already talked about, our lawyers are telling us that it may cost us between $250,000 and $500,000 to comply with all the requirements of the Whole Foods subpoena. That may not be a huge amount of money to a company the size of Whole Foods, but to us it is a fortune.”

    Whole Foods, by pursuing this (and the other) subpoenas you are unfairly punishing at least one smaller locally owned business through the cost incurred to them, thus affecting their bottom line of profit margin and possibly affecting labor and product costs at New Seasons stores. That in essence absolutely does put New Seasons at a disadvantage in a competitive market, and ultimately harms the consumer, and a whole bunch of people in our community who are reliant on Whole Foods for their paychecks. (and the City of Portland who are reliant on existing income tax revenue). Your actions are punitive, unfair, unethical and harmful to Portland.

    Sorry, Whole Foods, I’m not buying your PR spin. You might see targeting New Seasons as a necessity, but I see it as unethical black hat business practice. I simply can not support your position given your actions on this, nor will I further support your stores. In essence, stop being corporate bullies. At the very least, if you want the information from New Seasons and others, then you should pay for the costs incurred to those stores.

  44. mczlaw says

    Whole Foods lost me when they decided only to sell lobsters that had their own little crustacean condominiums. Just don’t get the idea of sea insects living in apartments–visions of Larry watching cable, drinking beer and eating kelp snacks. I also didn’t appreciate their Bunker Hunt-like attempt to corner the market on Rogue River Reserve cheese a few years back. As with Bunkie, it didn’t work.

    –mcz

  45. Gary Walter says

    Why doesn’t Whole Foods just ask a representative from New Seasons to give a deposition about whether they’ve been harmed or not.

  46. pdx_yogi says

    They lost me with their refusal to issue rain checks for “sale” items that are out of stock.
    That’s just plain old bait and switch, and is against Oregon law.
    I sent them an email questioning this practice and received no response.
    Perhaps I’ll notify Ore. Atty. General’s office.

  47. MyNextMeal says

    Interesting WF response. I can kinda see how it is likely that the FTC probably has placed an inexact and ill-defined burden on WF to prove that they “face substantial competition” in 29 markets (assuming that, in fact, Portland is actually one of the 29). They are a large Federal bureaucracy that specializes in enforcement of inexact and ill-defined regulations.

    But does the burden of proof established by the FTC require that WF subpoena business documents from competitors or suppliers?

    If so, then perhaps some of the blame for the stupidity of this subpoena business can be shared by the FTC. I’d like to hear FTC’s PR spin on the issue. And, if part of WF’s undue burden (ahem) is due to the FTC, then perhaps NS can get Oregon congress people involved to ensure that FTC’s processes don’t end up doing more harm than good to ensure a competitive market in the Portland area (as well as other locales).

    One would think that a consumer market survey (isn’t that a common business practice used prior to opening up a store?) could be one of many tools at WF’s disposal to make their case to the FTC. But I’m sure that a subpoena is a lot less expensive and provides a lot of interesting info to WF’s corporate HQ,to boot.

    So ultimately, nope, I don’t buy the WF response, either.

  48. crispychicken says

    @WF: Let me get this straight. Part of your argument/explanation/justification, as provided in the post by Paige Brady above, is that this is all okay since it’s not “just” NS being singled out, but rather a total of 96 similar companies across numerous markets? And that’s *better*? Does… not… compute…

  50. djonn says

    I’m not a lawyer, but I did read both the subpoena and NS’s response, and I have absorbed enough legalese over time to know that anti-trust is one of the two or three messiest, most arcane, and all-around irritating kinds of litigation there is. I’m seriously considering pointing a couple of my attorney acquaintances at this page in hopes of getting a better read on the legal context of this particular wrangle.

    Meanwhile — it *is* correct, as various folk in the thread have noted, that in legal terms the case under litigation is between Whole Foods and the FTC. New Seasons is not a party in that case (as their response to the subpoena notes in a number of contexts); essentially, WF’s lawyers are pursuing the idea that NS’s (and various other competitors’) proprietary business information constitutes essential evidence they need to make their case.

    The question for the court that’s actually handling the case is whether WF has the legal right to obtain that kind of information from NS — a privately owned business not otherwise involved in the dispute. In almost any civil action other than anti-trust, I’d expect the answer to be an obvious “No way!”. In anti-trust cases (as Brian Rohter’s post suggests) there are a slew of extra jokers in the deck, to the extent that the game starts to look more like Fizzbin (“queens are wild, except on Tuesdays or when the moon is full, in which case black sixes are wild and the player on the dealer’s left gets two extra cards”) than straight poker.

    To the extent that the FTC is driving the litigation, Whole Foods may indeed be “stuck” in a position of having to mount a vigorous defense. OTOH, given that the merger has long since been consummated and the local Wild Oats stores rebranded or folded, it’s hard to see what the FTC’s agenda in pursuing the case is — certainly nobody’s going to kick Food Front out of Hillsdale and reopen a Wild Oats in the space. I would also think that it would be in both the FTC’s and WF’s best interests to broker a settlement rather than drawing the case out further, especially in the present business climate.

    As it stands, so far as I can tell, this may well be one of those cases where the only real winners are the lawyers, who are racking up fantastic numbers of billable hours from all sides.

  51. whatthef says

    Whole Foods own words:
    “…[m]y goal is simple – I want to crush them and am willing to spend a lot of money in the process.”

    “…elimination of a competitor in the marketplace, competition for sites, competition for acquisitions, and operational economies of scale. We become the Microsoft of the natural foods industry.”

    My 2009 New Years Resolution is going to be that I will only buy things made by and sold by nice people.

    I disagree that boycotts don’t make a difference, they most certainly do, especially for those who are making choice.

  52. my year without says

    I have personally witnessed good and less good from both companies. Whenever I’m in doubt, I shop local, so New Seasons it is. Perhaps that is because I was a local small business owner. To take it even further, I joined a CSA so that I don’t have to shop much at all, and if I do, I prefer People’s Co-op where no is sitting back rubbing their big, wealthy belly.

    Ultimately, both NS and WF are businesses, thus both their goals are money.

  53. Jason Wax says

    Re: whether the FTC has imposed a burden on WF by requiring them to comply with “inexact and ill-defined regulations”, I think it’s worth noting that WF’s lead attorney in this case is Jim Fishkin in Dechert’s DC office. Prior to going into private practice, Fishkin worked in the FTC and is the guy who actually created the FTC’s supermarket merger enforcement program — that’s why WF hired him. I only point this out to make sure that everyone is aware the WF’s counsel knows exactly what the FTC is requiring of WF, and exactly how to handle it. No excuses for Whole Foods.

  54. Seth says

    I would consider a few simple questions like “What were your total 2007 sales of organic foods?” to be reasonable; that would enable WF to say “In this market, we (combined) have less than an X% share”.

    Weekly sales by store, and strategic plans, are not required for that.

  55. pdx_yogi says

    I think it’s an oversimplification to lump all businesses together because their “goals are money”.
    There are businesses that run a model and mission that is higher on the continuum of ethics & responsibility, and those that are more on the lower side. I’d place NS & WF respectively on those scales.

    I find it ironic that in order to prove there is healthy competition in Portland where in point of fact it does exist (other locales I can’t attest to), the end result of WF’s ploy will be to gravely harm competition by forcing NS to spend money it can’t afford to comply with this abuse of process.

  56. Jessica Roberts says

    I also have a family member who used to work at Whole Foods, and every time a position opened up at New Seasons, LOTS of “team members” from her store applied. I think that tells you something…

  59. Texan says

    I loved WF in Texas and shopped at their #2 store for years but now in Portland I find that the prices are so much more than other natural food markets and I try not to shop there. It kinda feels like they have changed their mentality..they were so much less fancy and more grass roots back then.

  60. JOEL says

    Whol;e food is simply frustrated because someone may offer better service than they do . thanks to this posting they have lost one customer for ever and we don’t even have “new season store “here .
    small marjket and supermarket chain need to get together and send them truck load of paper work , they want data flood them with it , it will take them months to sort thru it and yes do send the 18 wheeler at the lawyers office can’t accept it tough luck leave it in the halways side walk ……just flood them with it .

  61. Paige says

    Here’s a link to an Oregonian article from Sunday that provides a more balanced look:
    http://www.oregonlive.com/business/index.ssf/2008/12/new_seasons_balks_at_whole_foo.html

    Walter Robb, co-president and chief operating officer of Whole Foods Market also commented on the article to provide a lot more details and links to the FTC-related documents. You can read that here:
    http://www.oregonlive.com/business/index.ssf/2008/12/new_seasons_balks_at_whole_foo.html#2109782

    (posted by Whole Foods Market team member Paige Brady)

  63. TXCOWBOY says

    I may not have ever shopped at your stores, and I aslo may live in Texas, but I own my own company, and I wouldn’t want to give out that information either. I don’t see why they think ANYONE would believe they wouldn’t even be willing to pay these “consultant” and this “outside counsel” ALOT of money to pass the information under the table to them. Like it was mentioned there isn’t a penalty for violating the protective order, so what do they have to lose? Nothing. What do they have to gain? All the information they would need to either put you out of business, or “merge” your companies together. I have shopped at WFM from time to time, mainly for special products I couldn’t find anywhere else, but never again. They could easily defend themselves by having their “outside counsel” create dispositions from statements from the owners of the individual companies, and even by only using facts converted into percentages, instead of having companies on THEIR payroll go through all the paperwork.

  64. Cuisine Bonne Femme says

    Sorry, the above comment got cut off…anyway, what I was wondering about was the “more balanced article” comment from Whole Foods (Paige). I’m sorry, but as the facts continue to emerge regarding this issue, Whole Foods continues to look more and more disingenuous. What I found interesting in the O article are the large amount of comments from readers at the end, especially the CEO of New Seasons commenting on both the article itself and Walter Robb’s comments to it. I also find it quite interesting that there are a large number of people speaking up to support New Seasons, but there are very few Whole Foods supporters out there. Why is that?

    Finally, as New Seasons pointed out, and this is the direct opposite of what Whole Foods states, New Seasons is NOT the only store fighting the subpoenas. There are over 50 stores in the U.S. who are fighting the FTC Whole Foods subpoenas.

    Given past statements by Whole Foods with regards to “crushing the competition” under any means necessary, improper business practices by Whole Foods in the blog-realm (the famous sock puppetry example), and PR spin that keeps spinning, spinning, spinning itself into a corner, I find Whole Foods to come across as utter BS artists.

    Spin will only go so far when the facts lead. This whole thing could be the undoing of Whole Foods in Portland, and really, it would be their own damn fault. Oh, and the O article? It might be Whole Foods’ idea of a more “balanced article” but it still makes Whole Foods look like utter corporate bullies, out for themselves above all with little regards for the good of the community they are located in.

  65. Realist says

    Whole Foods says the customers have not been adversely effected by their take over of Wild Oats. Other than service and price, they mean. Customer service disappeared and prices more than doubled on several items I USED to buy there. I am not going back again. They will eventually die a natural death based on their treatment of customers and ridiculous pricing. The sad part is, they will take a lot of great competitors down first.

  66. Jessica Roberts says

    Just sent WF management a message:

    I was disgusted to read of your attempt to subpoena New Seasons’ sensitive corporate information. What, you are afraid that big bad 9-store chain New Seasons might offer better customer service and better products compared to poor little Whole Foods, with only 270 stores around the nation?

    You’re not fooling anyone. While I understand why it would benefit you to know exactly what next move your competition will take, I don’t see that it’s worth creating an image of yourself as an anticompetitive corporate bully.

    I used to shop at Whole Foods several times a month, because my work is right near one of your shops. No more. I’ll make sure to boycott your business for as long as you’re bullying local businesses in my back yard.

  67. Cuisine Bonne Femme says

    Jessica, I think it is important to note that Whole Foods is adamant in repeatedly stating that they have no choice with the subpoenas, and in essence it is really the fault of the FTA who is forcing them into defending themselves against the anti-trust suit.

    But frankly, after following this for sometime now, I find those statements from Whole Foods to be utter B.S. Whole Foods does have a choice on who they subpoena, in what manner in what information they are asking for. I am also finding many other less than transparent statements from Whole Foods which are being directly contradicted by New Seasons (with actual factual backup) and the media (including mainstream media).

    Regardless, this does not bode well in how Whole Foods is managing (or mismanaging) their customer and public relations regarding this issue. What I think is that Whole Foods are scumbags in the way they conduct business (slash and burn corporate model), they tried to play this one in Portland to their advantage and have not only been caught, but backed into a corner by the ultimate market decision makers – the public. Whole Foods just keeps digging themselves deeper and deeper into a negative PR hole.

    • Jessica Roberts says

      I agree, that is the line they are taking, but I also agree that I call bullshit. If it is indeed ‘out of their control,’ it still benefits them extraordinarily, and it still fits their ruthless corporate amoral attitude to date, and it is still outrageously out of control. They have certainly destroyed any goodwill (or at least neutrality) towards them in Portland. Even if they saw that coming, though, they may decide it is worthwhile to sacrifice one market for their national benefit.

      • Cuisine Bonne Femme says

        Jessica, I whole heartily agree with you. I think WF has underestimated the Oregon market and how absolutely A) fiercely loyal people are to quality locally owned businesses, B) how savvy people here are about mass information, especially on the internet, and C) How people here are a very strong cohesive community and call BS when they think they are being manipulated. I think WF normal information trickery and manipulation just isn’t working here, and they aren’t used to small local companies as well mobilized and as smart as New Seasons standing up to them. Once again Kudos to New Seasons, and their stance and ongoing response to this makes me more loyal to them than ever.

        You know, Eugene, Oregon voted down a Whole Foods a few years ago. For a long time I thought they were just being cranky, crunchy, provincial Eugenites. Now I think they were actually wise to something before the rest of us caught on.

      • Jessica Roberts says

        Hm, I hadn’t thought about the community aspect…I wonder if other communities would have a pre-existing quality forum like this one to unmask the PR crapola WF is trying to feed the public.

  69. better off says

    the back-and-forth, while fascinating, tires me. let’s all just retreat to our non-corporate, community-owned, neighborhood food cooperatives. no monopolies, no FTC, no teams of legal eagles. Just wholesome, good, local foods. No political BS. Shopping at your local food co-op GUARANTEES that your money will stay within YOUR local community

    Here, i’ll make it easier:
    if you live in…….shop at…….
    SE: People’s Food Co-op (SE 21st & Tibbetts)
    NE: Alberta Co-op Grocery (NE 15th & Alberta)
    NW & SW: Food Front (NW 23rd & Thurman/Hillsdale Hwy)

    Don’t have a food co-op near you? Start one!

    • Pearl District says

      Except I imagine the average New Seasons worker is better off, better compensated, and has better health care than if he or she were to work at a co-op. If I’m wrong, please correct me.

      • pdxbornfoodie says

        i asked a friend who has worked there and was told that full time food front employees (32/hrs. per week +) receive about five weeks paid time off after 1 year (vacation + sick pay) and only pay about $20/month for an insurance plan that includes alternative health benefits (acupuncture, massage, chiro). sounds like a pretty good deal to me. don’t know about alberta or people’s, or new seasons for that matter. i have a friend who works at new seasons and could maybe get that info, though.

  70. real culprit says

    What amazes me most about the back and forth conversation, is the absolute willingness of people to jump on any bandwagon that suits their purpose. People that want to defend New Season’s by attacking Whole Foods should really take a moment and ask themselves if New Season’s is really as innocent as they portray. They are also in business, and are using this to play the victim and garner sympathy. The fact of tha matter is, there is only one real culprit here, and that is the out of control FTC.

    The FTC would try to tell all of us, that the merger between Whole Foods and Wild Oats somehow harmed the consumer of natural and organic foods. Do you feel harmed? The market for these items is stronger than ever, especially in Portland, and the merger hasn’t impacted the market. In fact, you can now buy organic items in ever increasing numbers at Safeway, Trader Joe’s, Costco and even Wal-Mart. The FTC needs to stop wasting taxpayer money on a non-issue. Have you asked why there was seemingly less concern when Mobil and exxon wanted to merge? That deal was in the hundreds of billions of dollars. How about Cirrius and XM Satellite radio? That merger left one satellite company, the very definition of a monopoly, yet it went through with nary a hitch. Your anger and letter writing should really be to your elected officials to get them to tell the FTC to back off and let the market place sort itself out without the Government intervention to “protect” us.

  71. snowyaker says

    “What amazes me most about the back and forth conversation, is the absolute willingness of people to jump on any bandwagon that suits their purpose. People that want to defend New Season’s by attacking Whole Foods should really take a moment and ask themselves if New Season’s is really as innocent as they portray”

    Hmmm. I wonder how Whole Foods would respond if Safeway were to subpoena there records in a case totally unrelated to them. There is no band wagoning here. People see an obvious wrong. Whole Foods willing to grab these records to defend themselves while it conveniently benefits their company’s strategic planning. I’m done with Whole Foods and believe they usually got my Whole Paycheck or at least my whole grocery budget.

    New Seasons has a new customer now. Real Culprit – do you live in Texas? Just curious.

  72. Cuisine Bonne Femme says

    Oh for the love of god. Comparing 2 multi-billion dollar multinational mergers in the oil business and 2 national high-tech communications firm mergers is simply not the same as one large national small niche food company ACQUIRING local market share. This is basic microeconomics. There is no comparison. But that’s not the point.

    The criticism isn’t so much about the FTC or “organic” as it is about the way Whole Foods conducts themselves in this local market, especially around the FTC issue; conduct that many including myself think is predatory and black hat in execution and PR spin. New Seasons was put on the defensive by Whole Foods, who chose the subpoena and the ways in which it is being conducted. So of course New Seasons is doing what they need to do to fight that. In my book, that’s just smart business sense.

    As far as I see it, the public outcry against Whole Foods in Portland is the market sorting itself out. That said, if the market really cared about the issue, they would rally against the FTC and rally for Whole Foods, once again, market economics. Yet, I think the real issue is that the market in Portland prefers New Seasons, and like myself, feels the need to support them in both dollars and otherwise. Love the free market, including free market communications.

    Whole Foods is clearly in the wrong here.

    • real culprit says

      Cuisine Bonne Femme –

      The reason for comparing the various mergers, is to point out the duplicity of the FTC. They would let these mulitnational companies merge, and create an environment where consumers could truly be harmed, yet they insist on wasting taxpayer dollars to pursue a case where no consumer harm has been established. The FTC created “PNOS”, a term they made up to represent ” Premium Natural and Organic Supermarkets”. In this group, the FTC placed Whole Foods, Wild Oats, New Season’s, and a small chain out of Colorado. I’m sorry I don’t recall the name. When Whole Foods and Wild Oats merged, that left just three in their new group, and they tried to say the merger harmed the marketplace in Portland, thus the lawsuit they filed against Whole Foods in Portland. Since New Seasons was the only other PNOS they identified in Portland, Whole Foods needed to gather info to show that New Seasons was not harmed by the merger, but that they were doing fine, thank you very much. I shop mostly at Whole Foods, but I also frequent New Seasons, as there is one in my neighborhood, and this is the way it should be. As consumers, we have a choice, and the more the better. Based on your rationale for New Seasons’ fighting back being “smart business sense”, it seems as though your definition could apply to Whole Foods. If the FTC would drop the issue, we could all go back to shopping where we choose, without government intervention or complicity.

  73. snowyaker says

    P.S. Real Culprit

    Your statement “Your anger and letter writing should really be to *your* elected officials to get them to tell the FTC to back off and let the market place sort itself out without the Government intervention to “protect” us” begs a little investigation.

    Your or do you mean “our” local officials? Guess you’re not from ’round here as I suspected. Whole Foods much, do ya?

    New Seasons is a victim here. They are being legally wrangled to provide sensitive and confidential strategic planning, pricing, inventory and sales data to a company with a lousy track record of playing fair. I for one (and I’m not alone) don’t trust Whole Foods at all. I’m quite certain Whole Foods would love to be the only game in town given the opportunity. I actually kind of have my fingers crossed that Whole Foods loses the antitrust case. I’d hate to see organic providers get hurt though or people who live in areas where Whole Foods is the only organic option. Great food at those stores – lousy business practices at corporate.

    • real culprit says

      snowyaker –

      No, you are incorrect. About many things it turns out. I am not from Texas, rather I am from Portland. I said “your” elected officials, because the posts were coming from all over, not just Portland. I have talked to people at Whole Foods, and their goal is NOT to be the only game in town, rather they want to have the entire organic and natural food industry grow and be available to consumers everywhere. If you look at the steps Whole Foods has taken to establish Organic standards, Animal Compassion standards, micro loans to developing countries, etc., you’d see that as a whole, it is a company that is looking to change the way people eat across the globe, and not just because they shop at one store. Do you think Safeway, Costco, or even New Season’s would have been able to successfully market organics had it not been for the leadership shown by Whole Foods 20 years ago? I enjoy their stores and will continue to shop there. I will also shop at New Season’s, since there is one in my neighborhood. That is the way it should be. As a consumer, I can choose, and don’t need the FTC to regulate where I shop. Amazing that you seem to want to give the FTC a pass and not hold them accountable for continuing to waste OUR taxpayer dollars. Time to look beyond the end of your face, snowyaker!

      • Food Dude says

        Ok. You know, After all the stupid things the Whole Foods Chairman has said in the past, I’d like to think they would have learned, and are changing their ways. Unfortunately, this does not seem to be true. Not only that, but they seem to think I am stupid. Why do I say this? Apparently, they think I’m too lazy to check IP addresses. Here is what you get when you run “Real Culprit’s” IP address:

        Whole Foods Market Services, Inc. TWTC-AUSU-C-WHOLEFO-0 (NET-64-132-0-0-2)
        64.132.0.0 – 64.132.0.255

        # ARIN WHOIS database, last updated 2008-12-14 19:10

        OOPS!

        REAL CULPRIT WHOLE FOODS, IF YOU CAN’T BE HONEST ON THIS SITE, HOW MANY OTHER THINGS ARE YOU LYING ABOUT?

      • snowyaker says

        Way to go Food Dude! I was ready to bet dollars to donuts (Voodoo I hope) Real Culprit was from Whole Foods. Talk about not looking “beyond the end of your face!” Love it! Absolutely love it!

  74. Silvia says

    After spending a lot of time reading about this issue, I am sure I must side with New Seasons. Especially after reading from business owners who openly say it is very intrusive to ask for information of that depth, and that they would not be confortable giving it away to WF.

    Unfortunately for WF, people within the highest ranks in their organization have previously engaged in dubious behavior. They have no credibility when they tell us and New Seasons that they should be trusted because the documents are legally protected in a way that would carry almost no penalty to them for using the information wrongfully.

    They further damaged their credibility when in the past they changed the terms and tried to have some private documentation of natural foods businesses sent to the lawyer in their TX office. Why would the competitors of a company, which has previously used aggressive tactics to expand itself, want to send all of their private information on how they plan to deal with having that competitor to the headquarters of that company.

    Of course that these people are concerned, wouldn’t you if it was your business? And then again WF damages its credibility by posting in every possible place where Page was able to post a message that they are just stating their side, that we should be mad with the FTC and that NS is the only one who has contested this etc etc. Reading a bit further I find out that is not true. Are the people in this company really surprised that someone was to contest to this request?

    I am incredibly surprised that WF replies with almost indignation to the position that New Seasons has taken… that poor attempt to redirect the people’s anger to the FTC is also kind of annoying, but that is just bad PR.

    I had a great time shopping at wildoats. To be honest I didn’t really notice so much the change from WO to WF… I felt just thankfult to have a store that I can walk to with my dog, and gave the benefit of the doubt to the company although I thought the actions of the CEO were really uncool to say the least.

    I really don’t think I can do it anymore. There are many things wrong with our economic system, but at least I can still decline to support a business model with my dollars. I am thankful to have come accross the information to make that decision. Which makes me realize the importance of all of those internet neutrality movements.

    The workers there are very nice and I hope that even if WF looses market share in Portland (which I think will happen), I hope they find nice jobs.

    I will have to walk significantly longer to Alberta Co-op, but that is actually good too, me and my dog will be in better shape and I will be prouder of where I am putting my scarce dollars.

    —————–

    Does anybody know of a place that sells some deli gluten-free bread on the sweet side? WF carries my favorite pecan and raisins gluten free bread and I would like to find an alternative that is not one of those energy ones that look so bland.

    • Heidi says

      Hey Silvia! I buy Robin’s Honey Brown Rice Bread from New Seasons, and I think that there might be some other sweet ones in the same fridge section. They carry Food For Life Raisin Pecan Bread online, so that might be in the stores. Hope that helps!

  75. djonn says

    “Real Culprit”‘s IP address — and Whole Foods’ less than inspiring record of corporate conduct — notwithstanding, there really is room here for legitimate annoyance with the FTC. It’s easy to snipe at WF given that their outside counsel is behaving in classic “aggressive litigator” mode, but in WF’s position, I’d want a team of aggressive litigators defending me, too.

    As I’ve said before, I think New Seasons has the better legal and business posture in the present dispute over the subpoena; at the absolute least, I’d think NS should recoup any costs incurred for assembling any records that the courts eventually require them to turn over. But I also think it’s bizarre for the FTC to be pursuing their case against Whole Foods long after the merger in question has been fully completed. It’s not like they’re going to take the Hillsdale store back from Food Front, or get someone to reopen a Wild Oats across the street from WF over by Bridgeport.

    I am no great fan of Whole Foods, and I don’t want them to get hold of New Seasons’ confidential records. But I think there’s an opportunity here to pursue a degree of reform in the way anti-trust actions are litigated, and I don’t think it’s unreasonable for WF’s representatives here to make that point as well.

    • Food Dude says

      I agree, but I think they should be honest about who they are, rather than flat out lying in their posts.

      • Cuisine Bonne Femme says

        It’s pretty lame and unethical for a company to provide multiple posts under a pseudonym under that company’s IP. I think it’s called, um, Internet Sock Puppetry and Whole Foods has been caught (and slammed ) for doing it before. In fact, wasn’t it Whole Foods that spurred the whole internet sock puppetry into popular vernacular? It was! Idiots. No wonder their stock has taken a dive.

        Regardless, The New York Times had an interesting and very well researched article today on the Whole Foods/ FTC issue. http://www.nytimes.com/2008/12/14/business/14feed.html?_r=1. The Times’ assessment? Both Whole Foods and the FTC are acting like asses in this. Pretty damning article actually, and places blame squarely on the both of them. Quotes that resonate with me:

        “…As part of its evidence, the agency produced some internal documents and e-mail postings by Whole Foods executives.

        For instance, Whole Foods documents referred to Wild Oats stores as a “cash cow” and a “monopoly” in markets where Whole Foods didn’t exist. The documents also said Whole Foods was waging “war” on prices in markets where the two competed.

        And then there were blog postings by Mr. Mackey himself. Using a pseudonym discovered by the F.T.C., Mr. Mackey wrote in March 2006: “The end game is now under way for OATS. Whole Foods is systematically destroying their viability as a business market by market, city by city.” …”

        DAMN. Whole Foods isn’t doing itself any favors.

        Thus I concur, The FTC have acted like idiots in this whole thing, and Whole Foods have been both idiots and a**hats. New Seasons however remains an innocent third party, the target of bullies and any attempts by Whole Foods to state otherwise is bad spin at best and downright lies at worst.

      • djonn says

        It’s pretty lame and unethical for a company to provide multiple posts under a pseudonym under that company’s IP.

        I agree that it’s unethical for a company’s executives or other official representatives (inside counsel, PR department, etc.) to deliberately engage in sock puppetry.

        That said, I’m not sure the IP address alone proves that that’s what’s happening here. I would think that it’s at least possible that a lower-level employee, coming in by way of the company network, might reasonably find himself browsing a local food site where WF was mentioned, and might then choose to wade into an ongoing blog discussion on his own initiative without bothering to check in with the Corporate Powers That Be first. Such a person might or might not choose to “out” themselves as a WF staffer, much as a registered Republican might choose not to mention her party status on a blog dominated by really liberal Democrats. [Alternately, isn’t it possible that Real Culprit is simply a WF customer taking advantage of the free WiFi in the dining area?]

        Admittedly, either series of choices has its own pitfalls. As has been demonstrated, it’s not difficult to backtrail IP addresses. If RC is an employee surfing the Web without permission on company time, (s)he may be skating on or past the edge of WF’s corporate policy about appropriate employee use of company computers. Also, if RC is a WF employee, (s)he may have been unwise in admitting on a public blog that (s)he shops at New Seasons….

        There’s an axiom among genre fiction writers that goes “Never attribute to malice that which can be adequately explained by stupidity.” (I’ve most often seen it cited as Feist’s Law, after novelist Raymond E. Feist.) While “stupidity” may be an overly strong characterization in the present specific case, I think the axiom applies here. I’ll grant that the IP of origin tends to indicate bias, but I’d want more specific, more definite evidence before characterizing Real Culprit’s posts as deliberately deceptive.

        Specifically, I see only one statement of RC’s that looks to me as if it could possibly be characterized as a “flat out lie” — namely, the comment in the 5:18 pm post about WF’s goal “is NOT to be the only game in town”. Yes, it directly contradicts the much-mentioned Mackey-sockpuppet comments. But the statements about WF’s “real” goal could easily have come from an eager-beaver store level employee or recent junior corporate hire who’s recently gone through a round of company training, drunk the Odwalla, and simply believes what he’s been told by his immediate superiors about company policy.

        Let me be very clear. I agree that there are many black marks against WF’s executive-level behavior. And it is clear that Real Culprit is connected with Whole Foods. But it is NOT clear to me, based solely on the IP data, that Real Culprit is either a liar or a sock puppet. Those accusations are possible, yes — but they are also unproven.

      • pdx_yogi says

        Djonn, you sound as if you are seeking evidence beyond a reasonable doubt, as if this is a capitol murder case. This is far from that. All I need is a preponderance of the evidence: more likely than not that the accusations are true. They are proven to me; I’m convinced. I’ll never step foot in WF again, even though NS or other places are twice the distance.

  76. Heather says

    I, too, will continue to shop at New Seasons, but now it will be exclusively. Furthermore, I will Twitter my “boycott Whole Foods” message, blog it, and take any opportunity to slam them verbally.

    I always knew there was something I didn’t like about WF. They really shoulda known better than to screw with Portland.

  77. djonn says

    pdx_yogi: I’m not sure we’re on quite the same page.

    The matter of whether one shops at WF or not is one issue; I think most of us had made that call long before “real culprit” arrived in the thread, based on WF’s corporate-level actions.

    The matter of individual posters’ conduct here in the forums is a different issue. It’s certainly true that “real culprit” didn’t disclose a connection to WF prior to FD’s tracking the IP address attached to the relevant posts. But it is not necessarily true that “real culprit” is a liar or a corporate-sponsored sock puppet. However much some of us may dislike WF as a corporation, it isn’t fair to personally attack someone whose connection to WF we don’t fully know based solely on the IP data.

  78. snowyaker says

    I don’t really see any personal attacks on Real Culprit (love the irony in the name though) here. He/she was outed as having a connection to Whole Foods. That’s all. Oh, and a surprising knowledge of the case that suggests (doesn’t confirm) he/she has inside knowledge from corporate. It’s extremely common for companies to monitor blogs and comments these days. Again no confirmation on anything. However, once someone lies or misleads you once, they’re very likely to do it again. I’m just saying.

    • Paige says

      Just saw this discussion about Real Culprit (yes, you’re right, companies monitor blogs these days). As readers know, I’ve been posting Whole Foods Market’s official comments out here and I, of course, identified myself. I don’t know who Real Culprit is but some of the guesses here about a store level team member or customer sound right to me. As is usual for us, our store leadership team members have shared lots of information with our team members about what’s going on and what we are doing to fight the FTC. Knowledge is power and we share it freely. I didn’t see any info provided here that wouldn’t be available to any team member in our stores who is interested this the issue. We’ve also shared lots of information with our customers, so someone using the store’s WiFi to send their comments is plausible too. We do want our team members to identify themselves as such if they are representing Whole Foods Market, so sorry if that is not the case here.

      Thanks,

      Paige Brady, Whole Foods Market

  79. PJ says

    Dear Whole Foods and Paige,
    Nothing you say will make a difference here. Your crappy business practices and your outright LIES have lost you many customers in portland. I am returning everything I recently bought from you as well as re-posting any information I have about your dealings on any local blogs I subscribe to. Not only have you lost me as a customer, but you have gained me as an enemy. Congratulations on being complete asshats.

  80. pdx_yogi says

    I sent an angry email to WF. Within only an hour a VP in Bellevue WA wants me to call him to discuss my concerns.

  82. Lillith says

    Whole Foods has become Wild Oats, not the opposite. Whole Foods used to be a better, cleaner, fresher version of Wild Oats. Former employees of WOM were thrilled to death when WFM bought them out, lock stock and barrel. But soon after knocking off WOM, the true face of Whole Foods became apparent.

    They are simply the Walmart of natural foods. They come into an area and try to bump off as many competitors as possible to corner the market so that they can set prices and reduce labor costs, just like every other giant corporation in America. In other words, they are just another corporofascist organization fronting as a responsible and enlightened emplyer that wants to make the world a better place. Can’t you just hear the harp music and see the rainbows of light?

    Yeah, right. If you want to eat healthy and be supportive of sustainable lifestyle choices, shop at New Seasons or the Co-ops. Their prices may be a bit higher, but that’s the price you pay for having a conscience and keeping your money local. Whole Foods is NOT your friend, or a friend to the environment. That’s just hype.

    People that work there for a time will tell you it’s just like working at any other big corporation. They have lots of onerus rules designed to get empoyees in troublem, and weed out anyone with a brain or any personal style, or any individuality. They want autobots like every other corporation trying to get a foothold in Little Beirut (PDX).

    Back in 2002, when they were building their first store in the Pearl, I was told in an interview they had plans to build E-L-E-V-E-N stores in Portland Metro. Yeah, I had interviewed with them like everyone else in the natural foods industry. Their plans got waylayed by the rapid expansion of New Seasons, which at that point in time had only two stores, Raleigh Hills and Sellwood. The explosice growth of New Seasons and their success caught the corporate management at WFM completely off guard.

    Because they thought Wild Oats was their only competition to waltz in and take over the area. Wild Oats which had slithered in to buy out the former Nature’s stores. But then New Seasons exploded, and Trader Joe’s did too, and the Alberta Street Co-op, People’s Co-op and Food Front all expanded at the same time. Suddenly, WFM’s plan to come in and take out Wild Oats and corner the market wasn’t so damn easy anymore. Those rubes in the NW weren’t so stupid after all.

    which is why they only went after New Seasons in the supoena in the anti-trust trial. The suits in Cali figure if they can take out New Seasons next, the rest will fall in line. They figure to out-price and outgrow Trader Joe’s, and the co-ops aren’t even on their radar.

    If you are really into local and sustailable, boycott Whole Foods. as someone in the industry for the last fifteen years, I can tell you that Whole Foods will not be satisfied until they own Portland Metro and corner the market. They are not willing to share the market with the smaller providers. They want complete dominance and capitulation, and are willing to spend any amount of money to get it.