California admits error in rejecting 10 Mexican avocado loads
February 25, 2007
by Rand Green
California Department of Food & Agriculture inspectors were right on one count and wrong on 10 counts when they rejected 11 loads of Mexican Hass avocados crossing into the state on Friday, Feb. 16.
Effective Feb. 1, the U.S. Department of Agriculture allows Mexican-grown Hass avocados to enter California under a strict protocol designed to assure that no exotic pests potentially harmful to California's avocado industry would be imported with the fruit.
"Through Friday, we had rejected 11 out of 44 loads" of Mexican avocados coming into the state, Steve Lyle, CDFA's director of public affairs, told The Produce News on Wednesday, Feb. 21. The department released that information Feb. 16, stating that the reason for the rejection was the detection of an invasive pest -- the armored scale insect -- in the loads. Several Internet news sources quickly picked up the story.
However, the department now acknowledges that there was only one finding of an invasive pest in one load. The scales found in the other 10 loads were not invasive, but rather were native to California.
"The entomologist who identified those scales went back and checked the work" after the weekend and found that in every case but one "the pests were, in fact native to California. Therefore, [10 of] the loads which were rejected should not have been rejected," he said. "So the story isn't what it seemed last Friday."
Unfortunately, the loads were "rejected and diverted before we detected the error," Mr. Lyle said. "It is unfortunate, and we regret the error, but one point that we want to make is that we erred on the side of caution here. If you want to make an error, erring on the side of caution is preferable to the opposite."
The department continues to inspect "every commercial shipment of Hass avocados" that comes into the state through CDFA checkpoints, he said. "If we find invasives, we will reject the load, and if we don't find invasives, we will allow it in."
Whole Foods Market and Wild Oats Markets announce merger
February 24, 2007
AUSTIN, TX -- Whole Foods Market Inc. and Wild Oats Markets have announced that they have signed a definitive merger agreement under which Whole Foods Market will acquire Wild Oats Markets' outstanding common stock in a cash tender offer of $18.50 per share, or approximately $565 million based on fully diluted shares.
Whole Foods Market will also assume Wild Oats Markets' existing net debt totaling approximately $106 million as reported Sept. 30, 2006.
With annual sales of approximately $1.2 billion, Wild Oats Markets is one of the leading natural and organic foods retailers in North America. Wild Oats was founded in Boulder, CO, in 1987 and listed on the NASDAQ National Market in 1996. The company currently operates 110 stores in 24 states and British Columbia, Canada, under four banners: Wild Oats Marketplace (nationwide), Henry's Farmers Market (Southern California), Sun Harvest (Texas) and Capers Community Market (British Columbia).
"Wild Oats Markets and Whole Foods Market have both had a large and positive impact on the natural and organic foods movement throughout the United States, helping lead the industry to nationwide acceptance and to becoming one of the fastest growing segments in food retailing today," John Mackey, chairman, chief executive officer and co-founder of Whole Foods Market, said in a Feb. 21 statement. "Our companies have similar missions and core values, and we believe the synergies gained from this combination will create long-term value for our customers, vendors and shareholders as well as exciting opportunities for our new and existing team members."
He added, "The growth opportunity in this category has led to increased competition from many players, most of whom are not dedicated natural and organic foods supermarkets, but are considerably larger than we are. We have made 18 retail acquisitions in our history, many of which were platform acquisitions from which we have been able to accelerate our growth geographically. Wild Oats Markets will be our largest acquisition and is a great geographical fit as all of our 11 operating regions will gain stores and three of our smallest regions -- our Pacific Northwest, Rocky Mountain and Florida regions -- will gain critical mass. We will also gain immediate access into a significant number of new markets."
"As the natural and organic foods industry continues to receive attention from larger conventional players, the timing for our two companies to join forces could not be better," Gregory Mays, chairman and CEO of Wild Oats Markets, said in the statement. "We believe this strategy is in the best interest of our stakeholders, and our board of directors has unanimously recommended that Wild Oats Markets' stockholders tender their shares in this offer."
Whole Foods Market will be evaluating each banner as well as each store to see how it fits into its overall brand and real estate strategy. Wild Oats Markets has been rationalizing its store base over the last several years to shed underperforming stores, but some additional store closures are expected as well as the relocation of some stores that overlap with stores Whole Foods Market currently has in development.
Whole Foods Market expects to make significant investments in remodeling stores before eventually re-branding them as Whole Foods Market stores. Whole Foods Market agreed in the merger agreement to commence a tender offer on Feb. 27 for all of Wild Oats Markets' outstanding common stock. The tender offer is conditioned upon at least a majority of the outstanding Wild Oats Markets' shares being tendered, as well as customary regulatory and other closing conditions.
Wild Oats Markets' board of directors has unanimously recommended that Wild Oats Markets' stockholders tender their shares in the offer. The Yucaipa Cos., Wild Oats Markets' largest shareholder with approximately 18 percent ownership, has committed to tendering its shares.
Approval of the transaction by Whole Foods Market shareholders is not required. The tender offer will expire within 30 days, subject to extension and to the receipt of customary regulatory approvals. Whole Foods Market currently expects to close the transaction in April.