By now, if you haven't heard about the Amazon deal to purchase Whole Foods Market, you've clearly been living under a rock. In the wake of the news, much of the press has focused on how Amazon can disrupt the grocery industry, how the logistical support of the e-commerce giant will push Whole Foods to the forefront of the emerging grocery delivery industry and how Amazon could plug the 365 brand into its online store almost immediately.
What you haven't heard too much about is opposition to the blockbuster $13.7 billion deal, although that seems to have changed over the past few days. The deal is garnering scrutiny from shareholders, congressmen and unions, alike.
A Whole Foods Market shareholder filed a lawsuit to block Amazon's acquisition of the company. Robert Riegel argued the deal undervalues Whole Foods and is being made without sufficient transparency. The suit claims that Whole Foods' proxy statement, filed July 7, failed to disclose information it deems important to stakeholders.
"The proxy statement states that, in connection with negotiating the merger agreement, Amazon had preliminary discussions with certain Whole Foods executive officers regarding Amazon's desire to retain such officers following the closing," the suit says. "However, the proxy fails to disclose the timing and nature of all communications regarding the future employment and/or benefits relating to Whole Foods management," reported Austin American-Statesman (July 13).
Meanwhile, Rep. David Cillicine is urging Congress to hold a meeting to analyze the Whole Foods Market-Amazon tie-up. Cillicine sent a letter warning that Amazon's dominance in online retail could allow it to use Whole Foods to unfairly disadvantage other businesses.
"This transaction occurs during a long period of economic concentration that has already caused a decline in workers' wages and mobility," the congressman wrote, "essentially allowing a small number of monopolists to hoard the 'fruit of economic growth,'" reported Washington Post (July 14).
Finally, a union plans to file a complaint with FTC regarding Amazon's acquisition of Whole Foods Market. The United Food and Commercial Workers International Union claimed the purchase could trigger a wave of store closures, which would threaten jobs and eventually shrink customer choice.
"Amazon's reach will ultimately reduce the number of grocery competitors that consumers can choose from," Marc Perron, president of the union, wrote in the complaint. "Regardless of whether Amazon has an actual Whole Foods grocery store near a competitor, their online model and size allows them to unfairly compete with every single grocery store in the nation," reported Washington Post (July 14).
Clearly, this opposition is in the early stages, but the sudden appearance of some resistance indicates that the deal may not be easily approved. Be sure to stay in the know by keeping tuned to The Food Institute Blog and Today in Food for the latest updates.
It's certainly not over, but farmers and food producers may receive a few months' respite as tariffs in the Sino-U.S. trade war will not escalate for 90 days. Additionally, they can at least look forward to a new normal as the United States-Mexico-Canada Agreement (USMCA) moves...read more
Chris focuses on fresh, canned and frozen fruit and fresh and dried vegetables for the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He is a proud Rutgers University alumnus with a degree in English, and has a background in web writing for a variety of industries, including legal, foodservice and small-to-medium sized businesses. In his downtime you can find him watching New York Yankees baseball, hiking, enjoying live music and spending time with his dog Kaiden. He invites you to contact him via email at firstname.lastname@example.org to talk about anything food-related.
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