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Whole Foods CEO Panned Wild Oats in Web Postings

The chief executive of Whole Foods Marketposted messages on a Yahoo! chat forum under an alias for years, talking up his own company while predicting a bleak future for Wild Oats Markets, the rival it has since sought to acquire.

Company CEO John Mackey posted messages on a Yahoo! financial forum under the user name "rahodeb," according to a court document filed by the U.S. Federal Trade Commission and postings on Yahoo!

Mackey's messages painted a bright future for Whole Foods , the largest U.S. natural and organic grocer, and downplayed the threat posed by competitors.

"The writing is on the wall. The end game is now underway for (Wild Oats) ... Whole Foods is systematically destroying their viability as a business -- market by market, city by city," Mackey wrote in a March 28, 2006 posting.

It was cited by the FTC as part of a lawsuit aimed at blocking Whole Foods' planned $565 million acquisition of Wild Oats on grounds the deal would hobble competition and increase prices to consumers.

"Bankruptcy remains a distinct possibility (for Wild Oats) IMO if the business isn't sold within the next few years," rahodeb said in another March 29, 2006 posting on Yahoo!

Whole Foods confirmed Mackey had made the "rahodeb" postings between 1999 and 2006. It said references to those comments were among millions of documents the company provided to the FTC as part of the agency's antitrust lawsuit.

In a statement, the company said Mackey posted comments under an alias "to avoid having his comments associated with the company and to avoid others placing too much emphasis on his remarks."

"The 'rahodeb' postings are the personal postings of Mr. Mackey and not those of the company," Whole Foods said.

In separate comments posted on Whole Foods' Web site, Mackey said he "posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms."

"The views articulated by rahodeb sometimes represent what I actually believed and sometimes they didn't. Sometimes I simply played 'devil's advocate' for the sheer fun of arguing," Mackey said on the company Web site.

"All of rahodeb's postings also need to be understood in the context of the time that they were written. Because the competitive market has evolved so much in the last 5 years, older postings mean far less today than they did when they were written," Mackey wrote.

Whole Foods announced plans to buy Wild Oats in February. The companies have said the merger should be allowed to proceed in light of fierce competition in the overall grocery business.

But in some postings, rahodeb downplayed other supermarkets as potential competitors that could hurt Whole Foods. "If you are waiting for Trader Joe's or Wegmans to slow down the Whole Foods express train you're going to be waiting the rest of your life. It ain't (going
to) happen," rahodeb said in a Sept. 28, 2005 posting in response to another participant.

"You say that competition is increasing against Whole Foods, but continue to ignore the fact that your so-called competition isn't hurting them," rahodeb wrote in an Oct. 3 2005 posting.

The FTC's complaint was filed June 6, but portions were initially kept under seal. The FTC released the document late Tuesday.

On his personal blog, Mackey has accused the FTC of distorting his private statements in order to portray him as excessively aggressive and bent on eliminating healthy competition.

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