A congressman and a major labor union are questioning whether the retail giant’s agreement to buy Whole Foods could hurt consumers and workers. They want the federal government to scrutinize the deal.
David Cicilline, the top Democrat on the House Judiciary Antitrust Subcommittee, wrote a letter calling on his committee to hold a hearing on the deal because it “could impact neighborhood grocery stores and hardworking consumers across America.”
Marc Perrone, president of the United Food and Commercial Workers International Union, told the Washington Post he will file a complaint to the Federal Trade Commission opposing the deal. He argues that the acquisition will reduce the total number of grocery store options for consumers.
Together, Amazon and Whole Foods control just 1.4% of the food and grocery market, but Amazon’s history of disrupting industries and its wide distribution reach add to the perceived threat. By buying Whole Foods, Amazon will have physical locations within a one hour drive of 70% of U.S. households, meaning the company will be able to deliver items more quickly than ever.
Perrone is clearly concerned about the impact on union employees in the grocery business too (Whole Foods is not unionized, but other grocery chains are). Thousands of supermarket jobs have gone away in the past year. Amazon has said it doesn’t anticipate any layoffs as a result of the acquisition.
Any decision by the Feds about whether to challenge the deal will probably be weeks if not months away. Whole Foods shareholders have not even voted on whether to approve the deal yet. Investors don’t seem particularly worried about the deal falling through, though; at $41.92, Whole Foods shares are trading essentially in line with Amazon’s $42-per-share offer price.
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