The big consequence of the Amazon-Whole Foods deal no one's talking about Amazon has proved its power to disrupt markets. Now its proposed purchase of Whole Foods has some small farmers and food producers worried that they could be next in line. So say organic activists, farmers' advocates and economists who are just beginning to process the potential ramifications of Amazon's bid to buy Whole Foods, the country's largest organic retailer. The news, announced June 16, has already jolted grocery store stocks and prompted rampant speculation about the future of food delivery and bricks-and-mortar stores. But some small farmers and manufacturers are also starting to look at Amazon's record in other fields — and worry that the retail giant will use its market power to further centralize and corporatize theirs. (Amazon.com chief executive Jeffrey P. Bezos owns The Washington Post.) Such a move stands to boost large, industrialized organic operations, to the detriment of small and midsize players. But the real harm may come to the organic brand if Amazon pushes for price concessions that lead producers to compromise on environmental and formulation standards. Those price pressures have already driven major changes in Whole Foods' supply chain and within the organic industry as a whole, which has consolidated in the face of increased competition. But at Whole Foods, sourcing from small producers has remained a priority — and some worry that Amazon will not be so protective of them. "Whole Foods has been willing to work with [midsize farmers and producers] to take on added costs, and it's made a huge difference in their ability to make a living," said Scott Marlow, executive director of Rural Advancement Foundation International, a farmer advocacy group. "There is real concern about what will happen after it gets acquired." A representative from Whole Foods said the company "remains committed" to its small and midsize producers. Amazon declined to comment on the record. Read more on Wonkblog. |
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