Any seller will do this, it is natural. Watch how WholeFoods for years has replaced successful independent brands with "365" competitors. Any seller will act this way; only regulation will prevent it.
Regulation would not prevent Whole Foods and “some independent company” sharing data and producing these white label products to be sold exclusively at Whole Foods.
This very easily defeated regulation is a perfect example why they aren’t a silver bullet. Throwing your hands up and saying “just make government fix everything” isn’t realistic, there is overhead and cost and bad precedent in that.