US Representative David Cicilline, the top Democrat on the US House of Representatives antitrust subcommittee, is calling for a hearing on Amazon鈥檚 proposed acquisition of Whole Foods聽to examine how the deal will impact consumers and the US’s food and beverage industry.
The deal, which was announced in June, would be Amazon鈥檚 biggest acquisition ever, and would potentially give the ecommerce giant the power to disrupt the food and beverage industry, which is making many competing retailers nervous. It could also negatively impact food delivery services and independent grocers worldwide.
In a letter to the House Judiciary Committee on Thursday, Cicilline wrote, 鈥淎mazon鈥檚 proposed purchase of Whole Foods could impact neighbourhood grocery stores and hardworking consumers across America,鈥� and insisted that 鈥淐ongress has a responsibility to fully scrutinize this merger before it goes ahead. Failing to do so is a disservice to our constituents.鈥�
Cicilline also expressed concerns that the deal could decrease wages for workers and drive up food prices across the country, increasing the cost of living for American citizens. He wrote, 鈥淎mazon鈥檚 proposed acquisition of Whole Foods raises important questions concerning competition policy, such as how the transaction will affect the future of retail grocery stores, whether platform dominance impedes innovation, and if the antitrust laws are working effectively to ensure economic opportunity, choice and low prices for American families.鈥�
Amazon鈥檚 purchase of Whole Foods is expected to be completed later this year, but first must be approved by US antitrust enforcers.
In a note to investors Wednesday evening, Seabreeze Partners Management Inc hedge fund manager Douglass Kass expressed concerns about how a hearing on the Whole Foods purchase could affect Amazon鈥檚 shares. Said Kass, 鈥淚 am shorting Amazon today because I have learned that there are currently early discussions and due diligence being considered in the legislative chambers in Washington, D.C. If I am correct, word of this could lower Amazon’s shares by 10 percent overnight.鈥�
Despite these concerns, as of Friday morning, Amazon shares were up by 0.3%. Amazon has not yet clarified what it intends to do with the many Whole Foods retail locations or the chain’s assets.
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