Sunday, December 7, 2008

Retail Memo: New Seasons Market CEO Brian Rohter Speaks Out Again Today on the Whole Foods Market, Inc. Subpoena of His Company's Data


Brian Rohter, the CEO of nine-store New Seasons Market in Portland, Oregon, has a new post today on the natural foods retailer's Blog about the ongoing issue, which we were one of the first publications of any type to report on, of his company receiving a subpoena from Whole Foods Market, Inc. for New Season's sales, financial and related proprietary records and information as part of Whole Foods' defense against the U.S. Federal Trade Commission (FTC), which is seeking to overturn its acquisition last year of Wild Oats Market, Inc. -- a friendly acquisition that Whole Foods has essentially now completed in terms of integrating Wild Oats' stores and operations into the supernatural foods retailer's operations.

Below is New Seasons Market CEO Brian Rohter's post from today:

Sunday, December 7, 2008
We're Just Trying To Mind Our Own (Local) Business--Updated Sunday December 7th
By Brian Rohter - New Seasons Market CEO

The Oregonian has published their third piece in the last five days about Whole Foods Market’s demands for our internal emails, weekly sales data and marketing and growth plans. Here’s the link to it and here’s the link to the editorial that ran on Thursday and the story that ran on Wednesday.

We're very encouraged by the incredible amount of interest in this situation. We’ve heard from media outlets from all over the country and our blog continues to get lots of comments (although to be honest, in the last couple of days, it kind of looks like the same person is posting there over and over again).

Just to review the situation—Whole Foods Market is in a dispute with the Federal Trade Commission (FTC) about their takeover of Wild Oats. As it turns out, because of this dispute, Whole Foods has an opportunity to try and force us to give them copies of some of our most confidential financial records and strategic plans. We think there are lots of other ways they can make their case with the FTC without putting us at such a big risk. Want more information? Here’s the link to my original blog explaining the situation in detail.

There are a few things I’d like to comment about in today’s Oregonian story.

Whole Foods continues to insist that the documents they are demanding from us will be safe and that only their “outside lawyers” will see them. This is exactly same promise that was made last time files were subpoenaed in this case. Unfortunately, in the middle of that round, Whole Foods filed an amended motion to allow their “inside lawyer” to see the confidential information. They claimed that even though this “inside lawyer” was an employee of Whole Foods and was on their “Leadership Team”, it was okay for her to see everyone else’s private data because she wasn’t engaged in “competitive decision making”. Obviously, we’re very worried that might happen again.

Whole Foods also doesn’t seem to want to talk about the actions and the statements of some of their corporate executives which have led us and so many others to be concerned. If they hadn’t said stuff like, “…[m]y goal is simple – I want to crush them and am willing to spend a lot of money in the process.” and “...elimination of a competitor in the marketplace, competition for sites, competition for acquisitions, and operational economies of scale. We become the Microsoft of the natural foods industry.” and if their CEO John Mackey had not been caught posting derogatory information online about Wild Oats, using a made up screen name, we might not be quite as worried about what they planned to do with our private internal files.

The Oregonian mentions that Whole Foods is willing to make some “tweaks” to please us. That’s an accurate statement. Tweaks they are. Whole Foods is still demanding almost everything and is still insisting on the files we’re most concerned about.

The article states that we’re the only company looking to legally avoid the subpoenas. We have some new information about that. As of last Friday, only 50 of the 93 companies that have been subpoenaed have responded. The subpoena we got from Whole Foods demanded that we turn over all of our files to them on November 4th—over a month ago. I’m assuming that all the other companies had the same deadline. That means that almost half of the companies subpoenaed have not complied yet. I know for sure that some other grocers are waiting to see what happens with us before they decide what to do.

I’ve stated repeatedly, to the FTC and the media and Whole Foods that I think it’s silly to imagine, even for a second, that Whole Foods has some kind of monopoly on selling natural and organic foods in the Portland area. Having said that, I certainly am not an expert on the other 28 cities that are involved in this and I don’t have an opinion one way or the other about what should happen there.

-end Brian Rohter post-

Natural~Specialty Foods Memo published our first piece about the News Seasons Market-Whole Foods Market, Inc. subpoena issue on December 1.

Below is our recent coverage of the issue, along with the broader FTC-Whole Foods issue:

December 7, 2008: Retail Memo: Whole Foods Market Retains Top Washington D.C. lawyers and Politically-Connected Lobbyists to Plead its Case Against the FTC

December 6, 2008: Retail Memo: Fast-Growing and Scrappy Sunflower Farmers Market Ventures Deep in the Heart of (Whole Foods Country) Texas

>December 6, 2008: Retail Memo: Fast-Growing NF Chain Sunflower Farmers Market Responds to Whole Foods Market, Inc. Subpoena For Sales, Financial and Related Information

>December 3, 2008: Retail Memo: More on the Whole Foods Market-New Seasons Market Subpoena Issue; FTC Holding Firm For February, 2009 Hearing

>December 2, 2008: Retail Memo: Whole Foods Market, Inc. Closes $425 Sale of Stock to Private Equity Firm; Adds Members of the Firm to its Board of Directors

>December 2, 2008: Retail Memo: Portland, Oregon-Based New Seasons Market CEO Brian Rohter Responds to Whole Foods Market's Paige Brady

>December 2, 2008: Retail Memo: Whole Foods' Paige Brady Responds to Yesterday's New Seasons Market Piece; Lots of E-Mails; Issue Heats Up On the New Seasons Market Blog

>December 1, 2008: Retail Memo: Whole Foods Wants A Court-Mandated Financial Records Dump from Portland-based New Seasons Market; it Says For its Battle Against the FTC

In addition, Natural~Specialty Foods Memo has been writing about the FTC-Whole Foods Market, Inc. issue since the summer of 2007, when following Whole Foods' friendly acquisition of Wild Oats Market, Inc. the FTC raised its first legal objection.

You can read a selection of those stories here.

Natural~Specialty Foods Memo readers, we invite your opinions on New Seasons Market CEO Brian Rohter's post today, as well as on the entire issue. Just use the "comments" link below.

We also invite Whole Foods Market, Inc. to comment (using the "comments" link below) on Mr. Rohter's post today in Natural~Specialty Foods Memo, as director of social media Paige Brady did here earlier.

3 comments:

Paige said...

Wanted to direct you to an extensive comment posted to the Oregonian article by Walter Robb, co-president and chief operating officer of Whole Foods Market, providing a lot more details and links to FTC-related documents. You can read that here:

http://www.oregonlive.com/business/index.ssf/2008/12/new_seasons_balks_at_whole_foo.html#2109782

Thanks,

Paige Brady
Whole Foods Market Team Member

Anonymous said...

If the issue is complete non-disclosure of News Season's financial information, cannot there be a third-party system set up so this can be done in a way that would assure Brian Rohter?

Similar things are set up regarding non-disclosure information.

Why doesn't Whole Foods, its attys, and New Seasons explore such an arrangement. I would suggest bringing in an outside third party lawyer to mediate it. That person would then be the "trustee" in terms of keeping the information non-disclosed beyond the WF lawyers and the FTC.

Robert M. West said...

Fight the good fight, until Bush leaves the White House. Fight this subpoena as WF's headquarters in Austin gives them an unfair advantage. This is pure political BS headed by the Darth Vader of the Administration. If you want corporate support, I may be able to help you through Heinz (for sure) and possibly P&G.