Online retailer Amazon.com’s agreement to buy Whole Foods Market, the upscale grocery chain, for $13.4 billion has some members of the Congressional Black Caucus concerned because they fear it could lead to more food deserts in African-American communities.
In a July 20 letter to U.S. Attorney General Jeff Sessions and Maureen Ohlhausen, acting chairman of the Federal Trade Commission, Democratic Congresswoman Marcia L. Fudge of Ohio said the CBC is concerned about what the merger could mean for African-American communities across the country that are already suffering from a lack of affordable healthy food choices from grocers. Amazon and Whole Foods announced a merger agreement in June. The deal, however, has to be OKd by he federal government.
“This merger should be scrutinized beyond the normal antitrust review process that only examines the competitive impact. It should also include a careful review of the impact further consolidation will have on communities representing many of the food deserts across the nation. As you know, the USDA defines food deserts as parts of the country void of fresh fruit, vegetables and other healthy whole foods that are usually found in impoverished areas. Many of these areas are populations we represent. Therefore, we hope you consider whether this merger will contribute to increasing rather than reducing the number of food deserts, and potentially increasing health disparities for African Americans and the poor,” Fudge wrote.
The congresswoman added that the planned merger may exacerbate the food divide among vulnerable populations, including 41 million SNAP (Supplemental Nutrition Assistance Program or food stamp) recipients, particularly those in low-income and rural communities.
Fudge said SNAP recipients cannot use their benefits to buy groceries online but they may be able to do so in the very near future.
As part of the 2014 Farm Bill, the U.S. Department of Agriculture is preparing the roll out of 10 pilots that allow SNAP customers to use their electronic benefit transfer or EBT cards to purchase groceries online from retailers based in Maryland, New York and New Jersey.
Fresh, Amazon’s grocery delivery service, charges $14.99 a month and a person must be a member of Amazon prime, which costs $95 per year.
Fudge added the growth of online retailers has led companies to close their brick and mortar stores.
“Many of the communities we represent may feel the impact of these announced closures,” she said. “While Whole Foods may have a limited presence in many of our districts, further consolidation may force grocers who have a stronger brick-and-mortar presence in our communities to respond to this merger. As a result, it is possible these grocers will consolidate further and close stores that offer any, or the only, option to low-income communities,” she said.
Fudge added that CBC members do not oppose the merger now, but they want their concerns addressed.
Whole Foods, which is based in Austin, Texas, reported third-quarter sales of $3.7 billion. Amazon, which is based in Seattle, reported second-quarter sales of $38 billion. Its stock was recently selling at $987.58 per share.