Democrats in U.S. Congress urge review of Amazon's Whole Foods deal

[July 22, 2017]  By Ginger Gibson

WASHINGTON (Reuters) - A group of Democrats in Congress urged the U.S. Department of Justice and Federal Trade Commission in a letter this week to conduct a more in-depth review of online retailer Amazon.com Inc's plan to buy grocer Whole Foods Market Inc.

The lawmakers asked that the review include consideration of what effect the $13.7 billion deal could have on access to healthy foods in so-called food deserts where residents may have limited access to fresh groceries.

"While we do not oppose the merger at this time, we are concerned about what this merger could mean for African-American communities across the country already suffering from a lack of affordable healthy food choices from grocers," the letter said on Thursday.

The letter was signed by U.S. Representative Marcia Fudge and 11 other Democrats, including Senator Cory Booker.

Amazon and Whole Foods hope to expand access to fresh food, said Brian Huseman, Amazon's vice president of policy, in a letter to Fudge, also on Thursday.

"We agree with you that access to food is an important issue for the country, and we share your goal of improving that access," Huseman said in the letter.

Amazon has lobbied to be able to accept food stamps online and is participating in a pilot program.

"We deliver low-cost, healthy food to zip codes across the country that before Amazon had limited access to a large selection of high quality foods," Huseman wrote to Fudge.

Fudge's letter was made public by the United Food and Commercial Workers union (UFCW), which represents many of the unionized grocery workers in the United States. Fudge's office confirmed she had sent the letter.

A Whole Foods Market is pictured in the Manhattan borough of New York City, New York, U.S. June 16, 2017. REUTERS/Carlo Allegri/File Photo

Amazon's plan announced in June to buy premium grocer Whole Foods roiled the grocery industry and sparked worries the deal could raise prices, reduce the quality of products and hurt employment.

Still, most antitrust experts expect the Federal Trade Commission to approve the planned merger.

The letter asking for more scrutiny was praised by the UFCW union.

“Political concerns about Amazon’s acquisition of Whole Foods are growing for good reason,” UFCW President Marc Perrone said on Friday. “Amazon’s monopolistic desire to control the retail market and replace good jobs with automation is not only a direct threat to the hard-working men and women at Whole Foods, it’s also a direct threat to our economy and consumers."

Amazon has sought to dispute that it would monopolize the grocery industry. Wal-Mart Stores Inc currently controls the largest market share.

"We also do not plan job reductions as part of the acquisition, which if approved would result in a company with a combined less than 3 percent of national grocery sales,” Huseman wrote.

(Reporting by Ginger Gibson; Editing by Bernadette Baum and Meredith Mazzilli)

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