Washington, D.C.— Today, the national advocacy group Food & Water Watch urged the U.S. Federal Trade Commission (FTC) to extend the review of the proposed $13.7 billion Amazon.com-Whole Foods Market merger. The unusual and complex deal would pose substantial risks for consumers, farmers and innovative food manufacturers. The proposed mega-merger would jump-start Amazon’s floundering efforts to sell food and groceries by adding millions of square-feet of retail space at Whole Foods’ 436 U.S. locations.
The two companies already have many customers in common and the Whole Foods stores substantially overlap with Amazon Fresh’s distribution centers, giving the merged firm a strong platform to dominate the emerging online grocery and grocery delivery businesses. The deal also poses substantial risks to the thousands of smaller-scale and local farmers that have been supplying fresh fruits, vegetables and meat to local Whole Foods stores.
“Amazon’s proposed takeover of Whole Foods could destroy long-standing arrangements with local farmers as the e-commerce giant pushes for larger scale suppliers and unreasonably low prices,” said Food & Water Watch Executive Director Wenonah Hauter. “The deal could unravel decades of goodwill with local farmers who have helped build local food economies across the United States.”
The deal could also harm independent organic and natural groceries and the innovative food manufacturers that have been delivering the healthier food that shoppers are increasingly demanding. Moreover, the deal could also weaken certified organic products, as Amazon’s chaotic third party marketplace could introduce fraudulent organic food and dilute organic standards, in part in an effort to push down on the price of organic farm goods. Already, the U.S. Department of Agriculture is struggling to combat fraudulent organic imports and the proposed deal could exacerbate the prevalence and problem of organic fraud.
“Amazon has allowed its third-party sellers to sell counterfeit shoes, shirts and electronics — the proposed deal could allow a flood of fraudulent organics that would dilute and undermine commitment to certified organic food,” said Hauter.
Shoppers could also be disadvantaged in the face of Amazon’s opaque pricing algorithm that allows different consumers to pay different prices for the exact same goods. The complexity and volatility of prices and promotions can disadvantage and confuse consumers who may or may not be getting the best prices for any given good. This effective price discrimination is entirely inappropriate for food.
“The FTC must extend the review of the Amazon-Whole Foods merger to fully investigate the wide-ranging implication of this latest mega-merger,” said Hauter. “Today, a tiny number of retailers dominate grocery sales and this proposed merger poses more risks than benefits for farmers and consumers.”
Contact: Kate Fried, Food & Water Watch, (202) 683-4905, [email protected]