Published on: October 10, 2003
Next week marks the Food Marketing Institute's Public Policy Conference in Washington, DC, designed to bring food industry leaders into contact with elected officials who are able to influence the important decisions being made in the nation's capital. Business sessions, visits with Senators and Representatives, and a White House briefing all are on the agenda…and we conducted an exclusive e-interview with FMI's president and CEO, Tim Hammonds, to get an advance perspective on the sessions.MNB: It has been awhile since FMI hosted a government-related conference in Washington. Why the lapse, and what makes this year so important? And what’s behind the change in names from “Public Affairs Conference” to “Public Policy Conference”?Tim Hammonds:
In the past FMI held its Washington public policy meeting with other organizations, including FDI. This was a complicated exercise. FDI was one of our partners, but since FMI and FDI are now one, the process can be streamlined and is easier to coordinate. Since we have an opportunity to redesign this meeting under the merged umbrella, we decided to try it in conjunction with an FMI Board meeting in Washington. If our board likes the format, we could repeat it in the fall of every other year, giving us the perfect opportunity to bring together the most influential executives in the industry with key officials in government.
The reason this year is important is simple: it’s the multitude of issues vital to our industry before government right now. These include Country of Origin Labeling, WIC reauthorization, a Medicare prescription drug benefit, legal reform, FLSA reform, bioterrorism regulations, permanent estate tax repeal, generics and re-importation of drugs, and many more.
As to the name, the old name was Public Affairs Assembly. Since we’re starting a new tradition, a new name seemed appropriate. MNB: While it would seem that most of the industry’s positions would be in pretty good shape because there is a Republican president and the GOP controls both houses of Congress, does this situation invite unwarranted complacency that has to be guarded against?Tim Hammonds:
In an industry this big, an industry that touches every community, every consumer in America, there can never be any such thing as complacency. Our issues are too numerous and our priorities too broad to allow ourselves that luxury. All we need to do to remind ourselves of this is to remember that it was Richard Nixon who put wage and price controls into effect in this industry. A Republican administration is no guarantee of a benign business climate. On the other side of this coin, we need to find allies on both sides of the political aisle before we can make anything happen here in Washington. Both parties are important to us.MNB: For the first time in this Bush administration, the president’s approval ratings have begun to dip, and there seems to be some impatience with the conduct of the war in Iraq and the state of the economy. Any concerns about the 2004 election?Tim Hammonds:
In October of the year preceding an election, the job approval rating of the previous 6 sitting presidents (Nixon through Clinton) have all clustered between 50 and 53 percent regardless of where they were in prior months. This is a remarkable pattern of convergence that seems to be typical of our modern election cycles. President Bush’s own ratings are there right now. By the end of January, we will see the trend up or down from here that historically tends to persist into November. This is how we will know if there is cause for concern or not. Right now, the approval rating pattern is normal for this point in the cycle.MNB: You were heavily involved in the 2000 election; will you be as involved with the 2004 effort? Tim Hammonds:
I think it’s fair to say that I was visible but many in the industry were involved. This year, we have several within the industry who are actively involved in the campaign and actively helping to raise campaign donations. MNB: Let’s tick off a couple of issues, and you tell me where they stand at the moment, and what industry wants to achieve:
Country of Origin Labeling:Tim Hammonds:
We have made remarkable progress on building a consensus that the current country of origin labeling law has to be pulled back or changed dramatically before it goes into effect in September of 2004. While we’re still a long way from a legislative victory, I believe there is now widespread recognition within the producer community that this law is expensive, unnecessary and unworkable. When the USDA issues their proposed implementation regulations later this month, we believe it will become clear that the law itself is flawed and needs to be changed as quickly as possible.GMO Labeling: Tim Hammonds:
FMI works very closely with GMA on this issue. It’s a global issue but it’s also true that Americans are not as concerned about GMO products or ingredients as are the Europeans. We continue to feel that the strong U.S. regulatory approval process guarantees the safety of our food without the need for this type of labeling. Ultimately this will play out in the context of international trade and America’s need to keep our European export markets open. Our role is to keep advocating an approach based on sound science while those negotiations play out.Food Safety/SecurityTim Hammonds:
These are two separate issues, but let me tackle the security aspect of this. FMI continues to work with a partnership of 40 different associations sharing information with the US intelligence community now organized under the new Department of Homeland Security. People can find a description of this activity on the web site: FoodISAC.org. The key objectives of this group are to make the food industry a difficult and unattractive target for terrorists and to position the industry to recover quickly from an attack should one ever occur. We continue to work on the implementation of the new Bioterrorism rules. Our goal in this effort is to make sure we comply with the needs of the regulators without creating an expensive record-keeping nightmare that duplicates the effective recall programs already in place throughout the food industry.Counterfeit Online Coupons Tim Hammonds:
I think we have effectively delivered the message in cooperation with GMA that coupon fraud is not a victimless prank; it’s a crime that hurts your own neighbors in your local community. Both associations have jointly approached eBay asking that coupon auctions be stopped and we have jointly asked the state Attorneys General to actively investigate coupon fraud within their home states. We’ve begun to see some progress. The volume of fraud that spiked in September is showing some signs of receding, but the Joint Industry Coupon Committee has an active network of subcommittees working on a wide variety of innovative solutions. We don’t have a total solution yet, but I think we are on the right track.Organized Retail TheftTim Hammonds:
Organized Retail Theft (ORT) has become one of the most serious loss prevention, security issues confronting the retail community. We currently estimate that professional shoplifting rings now account for more than $30 billion in stolen merchandise each year. FMI is heading a coalition to make ORT type crimes a federal felony. Legislation (S. 1553) that would achieve this result has been introduced by Senator Larry Craig (R-ID). In the coming months we will work with the ORT coalition to move that legislation forward.MNB: There have been a number of states that have said they are looking into the acquisition of inexpensive prescription medications from Canada as a way of tamping down on exploding health care costs, a position with which the FDA is in violent disagreement. Is this a debate that FMI tends to get involved with?Tim Hammonds:
This is an important issue for our member pharmacies and we will be talking about it with our Board during the public policy conference. Re-importation was a bargaining chip used to secure the necessary votes to pass the Medicare reform bill in the House of Representatives. It’s an attractive idea because it could help to address the high cost of
brand-name prescription drugs and it might help our member pharmacies who are caught in the middle because they can’t access this market but consumers can, and do, through the internet. However, we do have a number of concerns including the quality of drugs coming in from other countries, the challenge of keeping counterfeit drugs out of the market, and the possibility that name-brand manufacturers might cut off exports of popular drugs to Canada if re-importation is allowed. Because this is not a simple issue, we are not ready to finalize a position on it just yet. MNB: What kinds of positions/actions do you believe that the federal government ought to be taking with regard to the outcry about obesity and nutrition?Tim Hammonds:
The government is uniquely positioned to unite all of us around the science-based messages that can be effective in changing consumer behavior. Obesity, especially childhood obesity, is a growing problem here in America and throughout the world. The solutions require all of us recognize the magnitude of the problem and to recognize that the causes involve dietary choices, lifestyles and healthy exercise. There is no single cause and no single solution. Behavior research shows that if we have any hope of changing behavior, we must repeat a simple and effective message over and over and over. If government can help us agree on the message, the industry can help to deliver it. This is the formula that has worked so well in the public/private partnership we used to create the Fight BAC food safety education program. If people become convinced that the solution is just to sue someone, no progress on improving health is going to be possible. If people become convinced they can make the personal choices to better the lives of their own families, then we have a chance to see real results.MNB: Finally, what’s the one sleeper issue that you think could emerge from the government over the next year or so, but may not be on the industry’s radar at this moment?Tim Hammonds:
Since you ask, take this as a concern, not a prediction. The cost of food has the potential to become an issue after decades of decline as a percentage of disposable income.
America’s food miracle has been built on science, technology, access to imports from all over the world, and the faith that we can commingle items for the most efficient processing and distribution without regard to safety issues. All of these foundations are now under some degree of attack.
Country of origin labeling threaten our ability to commingle items, bioterrorism rules threaten our ability to streamline distribution without an unmanageable paper trail of records and shipping manifests, GMO disputes with the Europeans threatens the ability to base technology decisions on sound science, and the recent collapse of global trade talks in Mexico threaten the trend toward increasingly open markets. All of these issues are manageable, but all are troublesome as they play out in the context of our upcoming national elections, and in the face of struggling economies worldwide. Note: FMI's Public Policy Conference is scheduled for October 15-17 in Washington, DC.