Whole Foods Market: Whats wrong with Whole Foods? Theres no question, Whole Foods Market has done a lot of good things. It practically created the modern market for organic foods. It requires its suppliers to meet standards for humane treatment of farm animals, which has greatly improved their existence. And WF supports the Fair Trade movement and has a more democratic workplace than just about any other organization of its size. So to give credit where its due, Whole Foods has done a lot of good. However, many of Whole Foods actions have been controversial and sometimes even illegal, especially where its labor practices are concerned. As the Texas Observer put it, People shop at Whole Foods not just because it offers organic produce and natural foods, but because it claims to run its business in a way that demonstrates a genuine concern for the community, the environment, and the whole planet, in the words of its motto. In reality, Whole Foods has gone on a corporate feeding frenzy in recent years, swallowing rival retailers across the country.... The expansion is driven by a simple and lucrative business strategy: high prices and low wages. (1) Im not suggesting that anyone stop shopping at Whole Foods or boycott it (see sidebar at left). I just want consumers to realize that even a company that puts on a socially-responsible face doesnt always live up to its own hype. Below are seventeen questionable aspects of Whole Foods Market. (Im not including that CEO John Mackey is a denier of anthropogenic climate change and that he opposes Obamas healthcare reform, because those are his personal opinions and unrelated to Whole Foods itself.) And when you get done with these, be sure to check out my summaries of dozens of media articles critical of Whole Foods. Business practices (1) Aggressive monopolization. Tons of independent co-ops throughout the country dont exist any more because Whole Foods bought them out. Whole Foods also absorbed all its significant competitors (Wild Oats, Bread & Circus, Fresh Fields, Bread of Life, Merchant of Vino, Natures Heartland, Food for Thought, Harrys Farmers Market, Mrs. Goochs Natural Foods Markets, and U.K.-based Fresh & Wild). (2) Theyve thus created a near-monopoly in the natural foods grocery business. Consumers are better served by a diversity of stores, but Whole Foods has been trying to wipe out the competition—and has been quite successful at doing so. (2) Fierceless devotion to profit. No one objects to businesses seeking profit, when a business puts on a socially-responsible face, consumers expect that the company will put Doing the Right Thing above Making More Money. Thats not always the case at Whole Foods. As Common Dreams says, A closer look at the companys business practices and Mackeys ideas about business and society reveals a vision not that different from a McDonalds or a Wal-Mart. In fact, the Whole Foods business model is more or less the standard stuff of Fortune 500 ambition. This is a vision of mega-chain retailing that involves strategic swallowing up (or driving out of business) of smaller retail competitors. It is a business model that objectively complements the long-term industrialization of organics (that is, large-scale corporate farms) over small family farms. It is also a vision in which concerns about social responsibility do not necessarily apply where less publicly visible company suppliers are concerned. Subsidiaries of cigarette manufacturers (for example, Altria, owner of Krafts organic products) or low-wage exploiters of minority workers (such as California Bottling Co., Inc., makers of Whole Foodss private-label water) are apparently welcome partners in this particular eco-corporate version of the sustainable future. (2,5) (3) Forcing smaller competitors to hand over private financial data. Whole Foods has been trying to force many of its smaller competitors to hand over private sales and financial data about those smaller stores. Whole Foods already holds a massive advantage due to its size, but thats apparently not enough for them. As one of the harassed smaller groceries put it, Allowing Whole Foods to look through all of our private information about how we operate and what our plans are for the future unfairly adds to their already large size and financial advantage. Weve been able to build a successful local business being David against their Goliath, and were happy to keep doing that, but we do object to having one hand tied behind our back. (19) (4) Lying. According to one farmer, a WF-approved slaughterhouse failed WFs inspection for cattle since its stun gun wasnt working properly, but WF continued to use that slaughterhouse for sheep. (So much for the supposed humane standards.) The farmer also said that WF wanted them to ship their cattle to a slaughterhouse 1400 miles away, and would still label the beef Local despite this. (26) See Misleading shoppers about its support of small farmers at right for another case of lying. Questionable products (5) Refusal to come clean on the use of GMOs and toxic chemicals in its products. Whole Foods is still not fully transparent about the use of GMOs in store-brand products, and has ignored shareholder requests for information on the use of toxic chemicals in products like baby bottles that are sold in stores. (12) Activists protesting WFMs sale of GM foods outside a store were arrested, likely at WFMs behest. (Why else would the police be there?) Whole Foods also asked shareholders to vote against an activist resolution asking WFM to report about endocrine disruptors and other toxic chemicals in its products. (13) (6) Trying to let organic farms use ammonium nonanoate. Whole Foods used its vote on the National Organic Standards Board to support letting farmers use ammonium nonaoate. (Fortunately, they were outvoted.) (NY Times, 2012) (7) Refusal to carry only turtle-safe shrimp. When Earth Island Institute asked Whole Foods to carry only shrimp caught in nets certified to protect endangered sea turtles, Whole Foods flatly refused. (1) (8) Selling organic food that possibly isnt. Much of WFs private-label frozen fruits and vegetables come from China, where organics are completely unregulated. This means no government (theirs or ours) checks to make sure that the farms are actually using organic methods. Its a huge leap of faith to think that suppliers on the other side of the world are truly supplying organics when they know that know one is checking up on them, especially when China has had such a long list of manufacturing controversies about contaminated products. To top it off, Whole Foods uses the USDA Organic seal even though the USDA isnt actually verifying that the food is really organic, and they use product names like California Blend, when the California Blend was really made in China. (21) And even for domestic food, Whole Foods has been caught selling produce as organic that is anything but. (25) (9) Selling dangerous food. You might think that with a company that champions healthy eating, anything in their store would be safe to eat. Youd be wrong. Whole Foods sold fish so toxic in mercury that one customers blood levels had to be reported to the Center for Disease Control. (17) Whole Foods didnt start identifying potentially mercury-laden fish in its California stores until the government forced them to do so. Even then, a quarter of Whole Foods stores failed to display proper signage as required by law. (18) In 2008, five people had to be hospitalized after eating E.coli-contaminated beef from Whole Foods. The beef was sold even after it was supposed to have been recalled. (22) Others were sickened by bad milk from Whole Foods, resulting in hundreds of thousands of dollars in medical expenses.... One victim, a twenty-eight year old mother, will likely require a kidney transplant. (23) And when Whole Foods opened its store in Napa, it got an F on the countys health inspection. (24) Labor issues (10) Anti-Union. Whole Foods is so fiercely anti-union it has actually fired employees who were trying to organize one. As Common Dreams says: Whole Foods matches Wal-Mart in its reputation for corporate anti-unionism. Its a hostility rooted in a management whose core values are intrinsically patrician and antidemocratic. The latter qualities were revealed in all their dismal hypocrisy most forcefully in 2002 when employees of the chains Madison, Wisconsin, store voted to unionize and join the United Food and Commercial Workers (UFCW). In a story that caught the attention of the New York Times and other media, Mackey had what might be described as a New Age temper tantrum, treating the specter of collective bargaining at one of his stores as a disaster of almost unspeakable proportions....The yearlong effort to defeat Madisons first organizing drive revealed Mackey as a socially enlightened poseur, a New Age business type who talks about love and ecological footprints and other enlightened things, but who turns to the hard boot of corporate scare tactics and disinformation when confronted with a group of employees who dare to assert their democratic right to self-representation. (1,10) And: In 2006, after truck drivers working at its San Francisco-based distribution center voted to unionize with the Teamsters, the company fired two of the drivers, altered its sick-leave policy, froze wage increases, refused to provide information to the union that was necessary to negotiate a contract, and harassed and disciplined employees, found NLRB investigators, who concluded that Whole Foods engaged in a variety of [illegal] retaliatory measures to discourage union activity. An out-of-court settlement required Whole Foods to reinstate the employees and reverse some of its policies. (20) (11) Poor working conditions. Workers organizing for a union in Madison said, The ridiculously high turnover rate, wages that are lower than the industry standard, pervasive lack of respect, constant understaffing, absence of a legally-binding grievance procedure, and other poor and unfair labor practices—all of which have led to widespread low morale—highlight the simple fact that workers ultimately have no say in the terms and conditions of their employment at any Whole Foods Market—not just Madison. Workers are not recognized or appreciated for their contributions. Instead, Whole Foods relies on worker apathy and lack of investment in their jobs to keep turnover high, and for the most part, wages, benefits, and other working conditions poor. This environment should be unacceptable for any workplace. (1) (12) Low Wages. Whole Foods has been widely criticized for keeping wages low. Companies such as Whole Foods or other non-union chain competitors are paying many of their hourly employees what in late 1960s dollars would be equivalent to the minimum wage or below. (1) And they can certainly afford to pay more. Whole Foods stores bring in $800 per square foot in a year, double the industry average. (11) Controversy about suppliers (13) Failure to support farmworkers. When United Farm Worker activists passed out literature at an Austin Whole Foods Market, Whole Foods called the cops and had them arrested. Embarrassed by the public outcry, Whole Foods then promised to support the UFWs grape boycott, but then broke that promise when it moved the store a couple of blocks away, saying the agreement applied only to the old location. They also produced deceptive literature for their customers blasting the farmworkers group and describing farmworker conditions as being no problem at all. About this, the UFW says, Several major cases have been tried in states such as North Carolina and Florida during recent years where it was found that workers were being kept by their employers in a state of virtual slavery. This is worlds away from the ideal and naïve (and disingenuous) information put out by Whole Foods. (3,4) (14) Misleading shoppers about its support of small farmers. Signs at Whole Foods Market say, Help the Small Farmer -- Buying organic supports the small, family farmers that make up a large percentage of organic food producers. What theyre not telling you is that while the number of family farmers is a large percentage of the total, overwhelming majority of organic output comes from corporate farms. As Slate put it: There are a lot of small, family-run organic farmers, but their share of the organic crop in this country, and of the produce sold at Whole Foods, is minuscule. Slate also pointed out that Whole Foods has pictures and profiles of small organic farmers in their stores, but doesnt actually carry products from those farmers. (14) One farmer complained that Whole Foods claimed to sell its products, when in fact it never has. (26) Corporate controversies (15) CEO posing as someone else on the Internet. For seven years, Whole Foods CEO John Mackey posted on the Yahoo Finance board about his company and its competitors while pretending to be someone else. By trashing rival Wild Oats, Wild Oats stock price could drop and he could buy them out for less money. Mackey also had the gall to anonymously praise himself. (I like Mackeys haircut. I think he looks cute!) (6) He didnt stop there: He also criticized specific employees, under the cover of anonymity. Daily Kos said of this, The very idea of the founder and CEO of a major national corporation hiding behind a pseudonym to lambaste one of his own hourly wage earners on an online message board says something about the personal moral integrity of union-busting executives. (7) After being discovered, he was unrepentant, trying to justify his behavior in a long blog post, and making a point to say specifically that his actions werent unethical. (8, 9) (16) Gagging shareholders. Whole Foods refused to let shareholders speak about shareholder resolutions at its annual meeting. Given that the annual shareholder meeting is the one time each year that top executives and directors have to show up and be accountable to shareholders, it is unconscionable for companies not to allow proponents to make a short statement in support of their proposals, said Beth Young, senior research associate for The Corporate Library (TCL), which assesses corporate governance....It also seems to flatly contradict the companys pledge to recognize everyones right to be listened to and heard regardless of their point of view, Mr. Herbert told SocialFunds. Whole Foods should recognize that any company that presents itself as socially responsible, as it does, is an easy target for a cynical press and public when it fails to uphold reasonable standards of corporate practice. (15) (17) Obfuscating executive compensation. Forbes magazine says, Media reports frequently tout Whole Foods pay policy, which caps the chief executives salary and bonus at 14 times the average workers pay. The Wall Street Journal, Slate, Harvard Business Review and BusinessWeek have all mentioned the pay cap, generally in favorable terms. But they all omitted one thing: stock options. When you count stock options, Mackey really made close to $3 million, or eighty-two times the average workers salary. Forbes continues, Whole Foods manages to obscure Mackeys total pay package by ballyhooing the salary cap. A company is certainly entitled to pay its execs whatever it wants, but the issue here is that WF is deceptive about how much its execs actually receive, relative to the lower-paid workers. (16)
Posted on: Tue, 01 Apr 2014 13:53:58 +0000
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