Pristine Whole Foods emits a smell

The Baltimore Sun

The federal government is busy investigating potential steroid use by professional baseball players, allegations of gambling by a basketball referee and an alleged dog-fighting ring tied to a star football quarterback.

So perhaps its investigation into Internet messages by the co-founder of an organic and natural foods chain seems tame. Over eight years, Whole Foods Market Inc. chief executive John P. Mackey made postings on Yahoo stock forums under a pseudonym in which he lambasted the competition while cheering his firm's accomplishments.

It's not like we believe everything posted on the Internet.

We wonder, for example, whether gushy postings about restaurants actually were posted by their owners hoping to drum up business. It occurs to us when the most reliable automobiles are criticized by unhappy owners that the authors might be rival car sales personnel.

Whole Foods said the Securities and Exchange Commission has launched an inquiry, which apparently involves more than 1,000 messages Mackey posted under the alias "Rahodeb," a scrambled version of wife Deborah's name.

Many postings took aim at Wild Oats Markets Inc., which Whole Foods agreed to acquire in February for $565 million.

Example: "I knew OATS was going to eventually crash (and I made quite a bit of money shorting them) because I know their stores, understood their strategy, and knew that Whole Foods would crush them in head-to-head competition, which is exactly what has happened."

Mackey also apparently made projections about his company's performance that he didn't disclose to the markets.

The Federal Trade Commission, which has filed a lawsuit seeking to block the acquisition on antitrust grounds, discovered the postings.

That a company championing health, nutrition, food safety and the environment would be involved in backbiting tactics is especially embarrassing, because the image among many consumers is that it has high ideals carrying through to all company practices.

Whole Foods, with 190 markets, does have a strong brand and multiyear expansion plans. Healthy eating is no fad.

Mackey previously dropped his annual pay to $1, which is admirable. But a chain so dependent on positive image must decide whether it wants a boss at any price with his new image. The question is whether it is time to seek a more sophisticated CEO to achieve the firm's potential.

Andrew Leckey writes for Tribune Media Services.

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