5 Reasons the Feds Won't Leave Whole Foods Alone

Welcome to "The Daily 5," our lighthearted look at the business news that amuses us.

If Microsoft is the creepy ex-boyfriend that won't go away, then the feds are beginning to look like Glenn Close from Fatal Attraction, with Whole Foods (Nasdaq: WFMI  ) playing the part of Michael Douglas.

This week, a federal appeals court said that a judge erred when it dismissed the Federal Trade Commission's challenge to the merger of Whole Foods with Colorado-based Wild Oats, which was completed last year.

The FTC has sought to block the merger because, according to its public statements, it believes the deal to be anticompetitive. Most days, I take the FTC at its word. But since this is The Motley Fool -- and we get to have fun as we invest -- I offer these five entirely baseless alternative reasons. Drum roll, please:

5. Because "WholeWild" sounds so unseemly.

4. Because FTC chairman William Kovacic is still sore from losing a squash match at the club last week.

3. Because free-range chickens are deadly when they run in packs.

2. Two words: Rahodeb rage.

And the No. 1 reason the feds won't leave Whole Foods alone: Because everyone knows that business goes better when government gets in the way.

Government gone wild
The FTC was wrong when it first challenged this deal, and it's wrong now. Whole Foods and Wild Oats have no more of a monopoly on the organic food market than "Microhoo" has on silly corporate acronyms. (Just ask DoubleGoo.)

Most grocers are selling organic in bulk now. Kroger (NYSE: KR  ) , Safeway (NYSE: SWY  ) , and SUPERVALU (NYSE: SVU  ) are increasingly stocking Soy Crisps next to Cheese Nips. Even Wal-Mart (NYSE: WMT  ) has gone green, for goodness' sake. Singling out WholeWild is nonsense.

Have a different take? Post your thoughts in the comments box below. And then, when you're done, get your clicks with related Foolishness:

Whole Foods is a Stock Advisor recommendation. Microsoft and Wal-Mart are Inside Value picks. Try either service free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. Tim seeks the best of the tech world as a member of the Motley Fool Rule Breakers team. The Motley Fool's disclosure policy is both free-range and fancy-free.


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  • Report this Comment On July 31, 2008, at 10:29 AM, JakeKSaul wrote:

    Its obvious here. A good company like WholeFoods tries to make money selling Americans good products, and the government steps in. I wonder who is whispering dollars into their ears. It could be the many large corporate food companies that try to feed us chemically enhanced foods. This is just my opinion but as a young man and a young fool, I really question many of the things our government is spending time and money on. Same with the radio stations. Get over it.

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