by Hilary Oliver

The U.S. Federal Trade Commission asked a judge Monday to halt all integration activities between Whole Foods Markets and Wild Oats, but industry commentators say it's too late. The FTC also stated that if the judge finds the anti-trust regulators have a strong enough case, they could seek to rebrand acquired Wild Oats stores with their former format and an independent management team.

While the FTC is seeking to keep the two companies' assets separate during the investigation, most stores have already been rebranded since the merger went through in 2007. Having to separate the two companies at this stage could ultimately be fatal to both companies, said John Moore, a former natural marketing director for Whole Foods who is now a consultant with Brand Autopsy, based in Austin, Texas. "They seem to have done a very good job of combining the two companies, from purchasing to management and marketing. To try to separate them out would be harmful to both companies," he said.

Moore explained that, considering Whole Foods' struggle in the current economic environment, plus the millions it's is spending battling the FTC, the company is fighting just to keep strong vital signs. "One possible implication [of separating the companies at this stage] is, let's say Kroger, a massive conventional player, could potentially buy up a depleted Whole Foods at bargain-basement prices, which would have a massive impact."

And while some speculate that a change of administration might result in changes in the FTC affecting the case, Moore was hesitant to form conjectures. "You'd have thought this aggressive FTC had come from a liberal administration," he said. "I find it odd [that it came from a conservative government], so I don't think it will change. But priorities might change."