It appears you are trying to point out that the FTC shouldn't necessarily look at the effect of the merger on the consumers, but on the suppliers.  While that's a fair question, I think it conflates two issues: supporting local (small) suppliers, and building the business.

First, the grist article correctly points out that other, large, supermarkets are opening up their own lines of organic produce/food, and Whole Foods now competes against that.  (this is the building the business issue)

Second, the article suggests that Whole Foods will likely turn away from small suppliers and try to "rationalize its supplier base."  (this is the supporting local (small) suppliers)

Second point first.  While "rationalization" of supplier base has traditionally happened, Whole Foods does seem dedicated to keeping local suppliers involved.  See the open letters between Whole Foods and Michael Pollan: one, two, three.  Sure, there's no guarantee, but it appears Whole Foods has made an honest effort to bring local suppliers into their stores.

Back to the first point: The argument made here is essentially: "well, Whole Foods used to be good, now they're going to become corporate, and that's bad." grist lets the other super markets (Kroger, Safeway, Wal-Mart) pass on involving local suppliers, but wants to tie the hands of Whole Foods.  Sounds like it would just give the other super markets a (potential) edge over Whole Foods which, in the long run, could hurt the chain.

I'm all in favor of supporting local suppliers, in fact, my family buys over 95% of our produce from the local food co-op (http://www.firstalt.coop) or directly from the farmers (through the market or CSA).

Tilting the playing field to burden a single chain seems unfair, and in the long run doesn't directly address the issues raised.

I think that this blog addendum to the grist article was not trying to make the point that Whole Foods, unlike conventional suppliers, should not be allowed to "go corporate": they clearly are, and will continue to be, and small to medium suppliers will continue to struggle with that. Certainly a focus of the main article was on the detrimental effects of monopsony, but to me it seemed a general condemnation, not one targeted at Whole Foods.

The point, I think, is that the conventional supermarkets have plenty of competition whereas Whole Foods, if the acquisition survives this next FTC appeal, will not. Meaning that adding to the existing problems of monopsony, which the merger would aggravate, we're looking at a pretty traditional monopoly. Trader Joe's really can't compete on the perishable side--and one thing none of these linked articles is discussing is the size of the stores themselves. Trader Joe's stores simply do not have the square footage of Whole Foods stores in any market I know of. If Trader Joe's were to step up the competition by focusing on perishables, it would require a serious re-haul of existing stores; and with the chain being a largely urban concern, that's a huge hurdle.

In the interests of full disclosure, I have a private grudge in the matter: a Wild Oats store was literally the only grocery store within walking distance of my home. When it reopens in April as a Whole Foods market, my choices will be to shop there--and despite Wild Oats position as a "premium" retailer, they were nowhere near Whole Foods prices--or drive to a conventional market or to Trader Joe's. I'll have to choose between spending my dollars where I would prefer not to, and adding a new carbon price tag to my grocery expenses. I'm not thrilled I have to make that choice. I'll certainly be keeping tabs on the second appeal.

Editor, http://www.getsolar.com

I am also shedding some tears over the Wild Oats totally shutting down nearby my house. However, I am lucky to have access to another regional grocer, Hen House, that has stepped up in support of local food. They market their local food products under the "Buy Fresh Buy Local" campaign, a nationwide effort to give smaller growers access to the grocery store markets. Although the local products are a minority next to the conventional items, people are catching on. check out http://www.foodroutes.org, for more info on the "Buy Fresh..." effort.

....using the sociological imagination like a lariat.