business news in context, analysis with attitude

Yesterday, we reported that the World Health Organization (WHO) is publishing a new set of dietary guidelines today recommending that sugar and sugar additives not account for more than 10 percent of the calories in a person’s diet.

The WHO report reaches different conclusions than one published last year by the US Academy of Science’s Institute of Medicine, which suggested a 25 percent calorie threshold for sugar.

The Sugar Association labeled the WHO report as “misguided and misleading,” and said insufficient exercise, not just poor diet, leads to obesity. The sugar industry reportedly is launching a vigorous effort to discredit and block the WHO report.

Our comment was that “the sugar industry apparently isn’t familiar with the concepts of academic or scientific freedom, and would rather risk the United States being thought of as a bully than deal with the issue in a calm, mature, and scientific manner.”

One MNB user agreed with our perspective:

“You are so right on with your comments on the WHO study and suppression of scientific freedom. The sugar lobby has been one of the strongest and most successful in Washington and all you have to do is walk down ANY of the food aisles to see the fruits of their labor. The evidence of sugar consumption and incidence of several chronic diseases, including obesity, has been reported for many years, but still gets no attention and now, "vigorous" campaigns to block the WHO report suggest things are really sweet between the lobbies and the decision-makers. In the meantime, our society suffers big time. Fighting diabetes, obesity, dental problems and intestinal problems must take a backseat to commerce: the sugar lobby pitches and the government catches it...and we strike out health-wise.

“Consider this: in 1900, we consumed roughly six pounds of sugar annually. Today, over 70 pounds. Any one wonder why "Big Sugar" would want to suppress the report and recommendations when we have an impending epidemic of diabetes and an ever increasing obesity rate? Any wonder why organizations promoting sugar would instead blame exercise? Any one wonder why they would not want the public to return to six pounds per year?

“Processed sugars at 10% of the diet is a lofty goal. Check out processed sugars on any nutrition label. From the pasta aisle to the condiment aisle to the canned goods aisle to the frozen aisle to the bread aisle; the labels don't lie.

“The reason sugar contributes to obesity is just as apparent. When we eat too much sugar, the body (always in self-preservation mode) converts it to fat so it can be stored and used when there is no food available. Our body still works like it did when we didn't have so much food around. And now, when we eat too much, the body is still trying to hang on to the extra food. As a result, we have both blood sugar problems and fat metabolism problems.

“Is it no wonder why Atkin's Diet works? THERE IS NO SUGAR TO BE STORED!!!

“The supermarket industry plays a role in the problem and can also play a strong role in the solution. And, in doing so, can raise their gross profits. Natural sugars, found in abundance in foods in the most profitable section (PRODUCE!) of the store, can also be so helpful for our body. Fiber, enzymes, nutrients and... FAT-BURNERS... are found in these foods. We are told to eat 5-7 servings of produce, yet supermarket operators don't promote this enough Even though produce departments have gross profits as high as 50%, we give this department 10-20% of the store and the back page of the weekly ad! We need to promote the right types of sugars, right type of foods and watch our customers get leaner and healthier.

“If supermarket operators would recognize the future growth of natural health shopping as these reports keep coming out, then these operators might see the type of growth that healthy supermarkets want to experience. Get aggressive in promoting health and your grosses will start looking better. (Don't believe me? Check out the departmental gross profit statements for Wild Oats and Whole Foods.)

“Kevin, keep on this argument; your comments were right on target and this type of reporting will help "embrace the vigorous debate." If knowledge of limits on sugar ever do catch on, the supermarket industry will need to re think its product mix anyway. Those stores not waiting for the governments "vigorous campaign" and turning their store's image healthy and will see healthy increases in sales and profits.

“The potential is here to help the store and your customers stay healthy. Grab that business, promote this debate about foods and health. Or perhaps you will see Whole Foods grab your market share and grow to a position of envy; the "new (age) Safeway"! As a clinical nutritionist, I can tell you...that would not be a bad thing! People would be healthier.”

Couldn’t have said it better.

Another member of the MNB community chimed in:

“Re: your bit about Big Sugar wanting to squelch the WHO's report on sugar being a major cause of obesity -- doesn't this smack somewhat of the tobacco industry burying memos and reports about the adverse effects of tobacco?

“Anybody add up lately how much the tobacco companies have ponied up as penance for those decisions?

“Given the political climate of "it's not my fault" (which I am NOT defending, only making an observation, by the way) seems like it's only a matter of time until US sugar interests get handed a fat (no pun intended!) lawsuit alleging that the sugar industry is to blame for the epidemic of obesity and diabetes sweeping the country.

“By the way -- if the report is based upon flawed research or biased conclusions, debate away. But if the science is sound, methinks the industry doth protest too much.”


We got a lot of reaction to yesterday’s story about United Airlines deciding to charge economy class passengers for the same “restaurant quality” meals that business class and first class passengers are getting for free. We were dubious, but the MNB community largely disagreed.

One MNB user wrote:

“I would participate in the opportunity to buy an airline meal. The same opportunity is available internationally on other modes of transportation (trains or bus).”

MNB user Abbie Weber wrote:

“My Mother and Father In-Law just returned from a trip to New York and they had the option to purchase the in-flight food. While the food was typical airplane food, they found it interesting that there is only a certain amount of food in stock on the flight. I would hate to be the person in the back of the plane that is counting on that meal. I hope United has a good plan in place for those sold out situations.”

Yeah, there’s a plan. The people in the back get scrod.

(Sorry about that. Couldn’t resist.)

Another MNB user wrote:

“I recently had the opportunity to purchase one of these in-flight meals, on a United Airlines flight from Minneapolis to New York. The meal cost $10, and while it was not what I would call "restaurant quality", it certainly held its own against the average fare offered in terminal shops. It consisted of a bottle of water, a decent grilled chicken sandwich, a fresh plum, a huge cookie, and a Caesar salad. All in all, I thought the value equation was quite favorable - I would certainly have spent more than $10 had I purchased a similar meal at, say, Starbuck's. And the convenience of being able to get a meal on the flight, after having literally run to catch it with not a minute to spare, was definitely a plus.

“An argument could be made that this meal should have been offered free - especially given that my ticket was a full-price $1400 fare, even for an economy seat. But I would much prefer to be able to buy a meal for $10 than to be forced to go without altogether. I hope this service is here to stay.”

MNB user Yair Esrubilsky wrote:

“I agree this sounds strange but I really think it is a great idea. Let's face it we haven't really been getting food in economy domestic flights for years now due to so much cost cutting. Whatever we do get is usually horrible. This could hopefully be the first salvo in a positive spiral of competition where airlines will outdo themselves with their offers of food on flights- charging separate for it will incent quality and the competition will ensure prices are fair. If you don't want to pay, you don't have to. It is actually a smart way to compete with the Southwests of this world- keep fare prices low and differentiate with your on-board offering at an extra cost.

“I'm hoping for one day to have a basic menu where we can actually choose among a few things and have a proper three course meal on long flights. I would happily pay.”

And yet another MNB user wrote:

“A great idea! I am a million mile flyer who rarely eats anything during air travel, even on frequent international flights. The food is generally average to poor and I feel much better as long as there is enough water to stay hydrated. Additionally, the ability to segregate and pay only for those services used is good for the flyer and the airline.

“Let's have more of the same in an ailing industry.”

MNB user Andy Casey, however, wasn’t buying:

“I just don't get this. I admit that I have had some pretty decent meals in first class, but that is still the exception to the rule and most of the good ones were several years ago. Why the fixation with offering food at all? Do airlines really believe anyone chooses a flight based on the food (or lack of it)? Any of these guys ever heard of Southwest Airlines?

“Seems to me it might make more sense to develop a marketing campaign around the theme that an airline is seriously focused on passenger safety and security rather than substandard food and questionable passenger comfort. Planes are a way to get somewhere, just like a car, bus or train. Given their current financial state, airlines would do well to remember who their competition is. And it isn't restaurants.”

And MNB user Jim Donegan expressed a certain skepticism:

“Airlines will offer for sale to all passengers the same food they offer for free to first class passengers?

“What food for first class passengers?

“I fly weekly, many times in first class, and (at least on United) there is no food in first class anymore.

“Of course, in a pinch, you could count that very filling Starbucks Biscotti as "food"!”

We were on a United flight recently, and got upgraded to first class. When we boarded, the flight attendant asked us if we’d like something to drink before takeoff. Well, one of the real pleasures of first class for us has always been a glass of champagne and orange juice -- it just seems to harken back to more romantic days. So, we asked for it.

The flight attendant laughed, and responded, ‘We’re not a champagne airline anymore. Don’t you read the papers?”

We also received some interesting emails about the Fleming situation. One MNB user wrote:

“Could it be that Fleming's problems started way before filing Chapter 11? Their propensity to deduct, at will, without reason, explanation or backup forced us to cut them off almost a year ago. You can't play financial games with your suppliers and expect to last long.”

That seems to be the message. The question is whether other companies are getting it.

And another member of the MNB community wrote:

“I am a recent addition to your morning e-mail, and would like to compliment you on your service and pass along my comment on one of your news articles.

“As a credit manager I (and many of the credit manager I have spoken with) read Fleming's press release on DIP financing entirely differently than what was stated by Mr. Willmott. It appears to me that Fleming's bank is waiting to see what the trade creditors will do before extending additional DIP financing, in effect I believe they are looking for the trade to guarantee Fleming DIP financing. As the senior lien holder, it will be the BANK that gains additional security when the trade creditors extend credits with only a JUNIOR LIEN security position.

“I doubt that many vendors will see Fleming's offer of a Junior Lien as an offer that presents enough of an economic incentive or enough security protection to convince them to grant Fleming normal open credit terms.”

Thanks for the context. If we’ve learned anything over the past few months, it is that we should’ve paid attention during the accounting class at Loyola Marymount…
KC's View: