Document Type
Article
Publication Date
Spring 2008
Abstract
One of the most maligned antitrust decisions in history involved a merger of grocery store chains. Indeed, even those voices inclined toward substantial antitrust intervention believe the U.S. Supreme Court erred in its 1966 Von's Grocery decision, which condemned the merger of the third- and sixth-largest grocery store chains in Los Angeles. For example, the president of the reliably interventionist American Antitrust Institute conceded that the Supreme Court "probably went too far" and acknowledged that "if Von's Grocery had remained the rule, all of our industries would be highly fragmented and consumers would have lost out on many cost-cutting efficiencies." The fact is, grocery retailing involves huge scale economies and low barriers to entry - a combination that renders most consolidations beneficial to consumers. Despite the apparent consensus on Von's Grocery, federal antitrust regulators seem determined to repeat its mistakes. Last summer, the Federal Trade Commission shocked the business community by seeking to block the merger of two highend grocery chains, Whole Foods Markets and Wild Oats Markets. Fortunately for consumers, cooler heads prevailed - the federal court hearing the FTC's merger challenge rejected the agency's motion for preliminary injunction. But while things turned out all right this time, the incident reveals a number of deficiencies in the merger review process. This article describes the Whole Foods debacle and catalogues four lessons regulators and courts should draw from the incident.
Recommended Citation
Thom Lambert,
Four Lessons from the Whole Foods Case, 31 Regulation 22
(2008).
Available at: https://scholarship.law.missouri.edu/facpubs/863