FTC continues effort against Whole Foods

WASHINGTON —  Federal regulators are continuing legal efforts to block Whole Foods Market Inc.’s $565-million takeover of rival Wild Oats Markets Inc. despite the deal’s having closed in late August.

The Federal Trade Commission tried to block the deal earlier this year on antitrust grounds. A federal district court ruled against the agency in August. The FTC appealed that ruling, but the U.S. Court of Appeals for the District of Columbia Circuit refused to stay the transaction pending the outcome of the appeal. The nation’s two largest natural and organic food grocers then completed the deal.

Federal regulators usually end litigation after a transaction is completed, because it can be difficult or impossible to unwind. In a recent case involving oil and gas refiners in the Southwest, the FTC threw in the towel after the courts ruled the company combo was legal.

However, the FTC said Monday that there was still time to remedy the acquisition’s anticompetitive effects because Whole Foods continues to operate many Wild Oats stores separately, under the Wild Oats name.

Whole Foods filed a request with the court Oct. 9 to dismiss the FTC’s appeal. But in a Monday filing, the FTC said the appeal was still relevant and asked the appeals court to set an expedited schedule for the case.

Charles F. Rule, an antitrust attorney and former director of the Justice Department’s antitrust division, said Wednesday that the FTC’s decision to continue its appeal was surprising and unlikely to succeed.

“If the court of appeals thought they had a chance, they would have granted the stay,” Rule said, as the FTC requested in August.

A Whole Foods spokesman declined to comment on the latest development.