Wild Oats acquisition delayed by appellate court

A federal appellate court in Washington has delayed the acquisition of Wild Oats Markets by Whole Foods Market, citing the Federal Trade Commission’s argument that the deal should be blocked pending the outcome of an appeal of a lower court ruling.

The FTC filed a lawsuit in June to stop Whole Foods’ US$565 million purchase, arguing that it would reduce competition and increase prices in the marketplace for natural and organic foods. Whole Foods countered that the deal would not harm competition because the market for organic and natural foods had expanded to include megastores like Wal-Mart and traditional grocery chains like Safeway. Earlier this week, the District Court had approved the merger.

Judge Paul L. Friedman of Federal District Court in Washington refused the FTC’s request to block the deal. The commission then filed a motion to keep the deal from moving forward pending the outcome of its appeal of Judge Friedman’s ruling. The appeals court has asked Whole Foods to make its arguments for why the deal should proceed. The commission would then reply. The court said the temporary delay should not be construed as a ruling on the merits of the case.