John Mackey, who built the Whole Foods Market chain, does not practice the “ethical” methods that he preaches. Mr Mackey, who admitted last month promoting his health food chain through an alias on a Yahoo forum, has been found privately contradicting his company’s public claims. Mr Mackey admitted making hundreds of internet posts, mostly praising Whole Foods and trashing Wild Oats, posing as a character named Rahodeb. He posted comments like, “No company would want to buy Wild Oats Markets Inc., a natural-foods grocer, at its price then of about $8 a share.” He also said Whole Foods would never buy Wild Oats because the locations were far too small. He speculated that Wild Oats eventually would be sold after sliding into bankruptcy or when its stock fell below $5. A month later, “Rahodeb” began slashing management and other areas of Wild Oats. Yet, now Mr. Mackey is trying to buy the company?
Mr. Mackey argues that the acquisition will not push up prices of so-called natural foods. Yet, the Federal Trade Commission (FTC), which wants to block the deal on competition grounds, produced evidence that it said proved that Mr Mackey does not believe his public arguments. Central to the FTC’s argument is an e-mail that Mr Mackey sent to his board in February, the month in which the deal was agreed, which said that the Wild Oats acquisition would allow Whole Foods to “avoid nasty price wars”. The FTC’s lawyers cited Mr Mackey as telling his board that Wild Oats “is the only existing company that has the brand and number of stores to be a meaningful springboard for another player to get into this space . . . Eliminating them means eliminating this threat forever, or almost forever.”
I wonder what would cause such a well respected organic food guru to do such a thing. Why wouldn’t buying the $670 million company, Wild Oats, in order to eliminate his competition, be enough? Was it really necessary to anonymously trash his rival for over 7 years? It’s not just about doing the right things, it’s about not doing the wrong things. Why would Mr. Mackey go out of his way to write hundreds of awful comments about his competition? If he truly believed in his business, he should have felt no reason to unethically trash his competition.
The Wall Street Journal Friday, July 20th 2007
