I think the first ruling was correct. Whole Foods competition is not limited to just other organic grocers. Regular grocers are upscaling and increasingly devoting aisle space to organic products.
In a 2-to-1 ruling, a three-member panel of the United States Court of Appeals for the District of Columbia Circuit, in Washington, sent the case back to a lower court to consider the evidence more fully, suggesting that District Judge Paul L. Friedman had rushed a decision.
The ruling left unclear what would happen if the courts find against a merger that has, for all practical purposes, already occurred.
The request to block the $565 million merger was brought by the Federal Trade Commission, which had argued that Whole Foods' takeover of its competitor would limit competition and increase prices in the marketplace for natural and organic foods.
In a statement, Whole Foods said it was disappointed with the court's ruling and was considering its legal options. The company, which is based in Austin, Tex., closed the deal with Wild Oats last August, and has already shut four Wild Oats' stores and reflagged 27 others as Whole Foods stores.