Court files reveal Whole Foods plans

washington -- Federal regulators filed court documents Tuesday that revealed confidential details about Whole Foods Market Inc.’s proposed $565-million purchase of Wild Oats Markets Inc.

The Federal Trade Commission, which opposes the merger on antitrust grounds, outlined concerns that stores in competitive markets would close and consumers would face higher prices for organic and natural foods if the deal goes through.

The FTC documents disclosed that Whole Foods planned to close 30 or more Wild Oats stores, a move that the company believes would nearly double revenue for some Whole Foods stores.

The agency also revealed how Whole Foods negotiates with suppliers to drive up costs for Wal-Mart Stores Inc. Regulators also discussed the firm’s closely held marketing strategies.

A judge is considering whether to block the deal temporarily.

Many of the details in the documents, which FTC lawyers filed electronically, were not meant to be released publicly, and words intended to be redacted were electronically shaded black. Court officials realized the mistake and replaced the filing with redacted documents.

The Associated Press downloaded the document from the public server before it was replaced.

Whole Foods, based in Austin, Texas, said it was investigating the “apparent improper release . . . of confidential proprietary business information.”

FTC spokesman Mitchell Katz declined to comment.

Although such a filing error has happened before, it comes in a particularly bad case for the government. The proposed merger generated widespread attention from analysts and industry officials largely because the court case opened a window into the inner workings of the two companies.

Separately, the FTC said Wild Oats, based in Boulder, Colo., retaliated against former Chief Executive Perry Odak, who testified against the grocer in an antitrust case and said Whole Foods was the only retailer capable of causing a big drop in Wild Oats’ sales.

The government accused Wild Oats of exacting revenge on Odak for his testimony.

“He was to receive substantial future payments from Wild Oats under his termination agreement with the company,” the FTC said. “After receiving the transcript of Mr. Odak’s testimony, the defendants [Whole Foods and Wild Oats] appear to have withheld certain payments due to Mr. Odak.”