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Unwholesome Antitrust

What is it with antitrust authorities and supermarket mergers?  Here’s a letter that I sent today to the Wall Street Journal:

Arnie Celnicker argues that the Federal Trade Commision’s challenge of Whole Food’s merger with Wild Oats is justified by various “market nuances” (Letters, July 7).  Among these is the fact that “financial markets have deprived Wild Oats of the capital to compete head on with Whole Foods” and the fact that consumer demand for organic foods is skyrocketing.

How in the name of free-range chicken do these facts justify government blocking this merger?  Precisely because consumers now want more and more organic products, financial markets have every incentive to invest in firms catering to this growing market if these firms are well-managed.  Wild Oats’ inability to get adequate private financing in this growing market is strong evidence that its assets now are poorly managed.  It’s only natural that Whole Foods spots and seizes this opportunity to use these assets more effectively at meeting consumer demands.  The FTC’s interference – an unwholesome additive to the market – jeopardizes consumer well-being.

Donald J. Boudreaux