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    Published on: November 7, 2003

    Sometimes going to the movies makes us feel old. This is what happened last week when we saw "Kill Bill: Vol. 1," the new film by director Quentin Tarantino.

    "Kill Bill" is the story of a female assassin who is the victim of an assassination attempt by the squad she used to work with. She survives, and starts to exact revenge.

    Now, while that's the basic plot, "Kill Bill" is about a lot more than plot. It’s about blood and gore and over-the-top fight scenes that are both compelling to watch and hard to look at. It's more about style than substance, though Uma Thurman and Lucy Liu are terrific as the assassin and one of her targets.

    There wasn't enough story for us, and we found ourselves wondering what happened to good old fashioned plots and complex characters…and then wondering when we got so old that this kind of cinema just isn't as mesmerizing as it used to be. (Then again, we'll probably go see "Kill Bill: Vol. 2" when it comes out, so maybe we were more captivated than we thought…)

    As for compelling plots and complex characters, you can find those in "Mystic River," the Clint Eastwood-directed version of the acclaimed Dennis Lehane novel. Somber and focused, with a straight narrative line that is shaded with the complexities of guilt and responsibility, "Mystic River" is the story of three men linked by a youthful tragedy, and what happens when a new tragedy unearths the emotions of past and present. The acting is magnificent - Kevin Bacon, Tim Robbins, and especially Sean Penn are just unbelievably good, and the Boston neighborhoods in which the drama takes place are as much a character in the piece as the men the actors play. Go see it.

    And here's the MNB wine recommendation for the week…a 2000 Jumilla from Altos De Luzon, a wonderfully full-flavored wine that goes great with veal (or probably any other game). This is a blend of two Spanish red wine grapes that we've never had before - monastrell and tempranillo - as well as some cabernet.
    KC's View:

    Published on: November 7, 2003

    On the subject of Kraft, Dean Foods and Frito Lay looking at SEC investigations into their relationships with Fleming, we wrote yesterday that "it figures that Fleming, even in rigor mortis, would figure out a way to drag a few more souls into hell with it."

    One MNB user wrote:

    I am sure that Fleming details will be coming out for quite a few years, and it will go down in history as the “Enron” of the grocery wholesale business.

    Scary thought.

    We also wrote yesterday that as the SEC looks at the financial arrangements between Fleming and these three companies, the problem could be "figuring out what proper behavior and appropriate bookkeeping are in the supermarket industry may be next to impossible."

    MNB user Glen Terbeek responded:

    For once, I take exception to your comment "figuring out what proper behavior and appropriate bookkeeping are in the supermarket industry may be next to impossible."

    The answer if very simple; the conversion is tough! If the industry eliminated the unproductive and corruptive selling and reselling of product until it gets to the store's back door, and if promotional dollars were paid for real shoppers' purchases (i e POS), all the accounting problems would go away. Why, because this simple model matches the real economic value added created in the industry's supply chain. It also might make the grocery industry more competitive to Wal-Mart again, since all the focus would return to the stores' performance in their marketplace. For sure it would quickly rationalize the current, redundant logistic systems in place today.

    Unfortunately it has taken bankruptcy, government threats, and financial scandals to point out the obvious disconnect the industry has with the economic realities of today's marketplace.

    My favorite saying about the industry is: "No one wants to be first, every one wants to be second." In this case, I would guess that Fleming and others didn't want to be first, and I would guess that no one wants to be second. I believe that it is up to them.
    We misspoke, and didn't mean to trivialize the obvious corruption in the financial infrastructure of the food business. We just meant that for people outside the industry, it's all gonna look like a helluva mess…


    And another MNB user wrote:

    Regarding the stories yesterday, first, about Kraft and Frito-Lay and their suspect dealing with Fleming and, second, how Wal-Mart has zoomed to its size and impact perhaps on the backs of its employees:

    Not too many years ago, we would have expected some federal agency or a Congressional committee to thoroughly dig into possible violations of the old Robinson-Patman Act which assured all retailers that promotional allowances and other practices that had an effect on costs must be even-handed and available to all competing retailers on proportional and equal terms. This would have included ad allowances, display allowances, slotting allowances and even payment terms including cash discounts.

    I don't know if Robinson-Patman is still in effect, whether it has been replaced or revised by some other federal law. But I do know we did not have these type problems in those days, and that manufacturers, distributors and retailers (chain and independent alike) feared being accused of violating the laws in effect at that time.

    It seems anything goes these days, especially if it could result in special treatment from the big guys, like Wal-Mart today and Fleming yesterday. I'm sure many wholesalers and retailers alike, whose plants or stores have been gobbled up or boarded up, long for the good old days when the feds cared about a level-playing field.





    In a piece earlier this week about Wal-Mart's trouble with the immigration authorities, we wrote that "the all-consuming drive to lower costs can sometimes lead to an organization being blind to the law."

    This prompted one MNB user, a Wal-Mart employee to respond:

    I don't believe that you will find that Wal-Mart, on the whole, is "being blind" to the law. That some members of the organization are, in their quest to advance, will and do cut corners that could lead the company into situations that reflect on the company more so than on the individuals themselves.

    Or, at least, that's what Wal-Mart opponents would have us believe; that it is the company, solely the company, not the individuals that do the unlawful acts.


    As an example of the responsibility of the individual rather than the company, this MNB user quoted extensively from a posting on The Motley Fool website on the subject of working employees off the clock at Wal-Mart:

      "There is no doubt in my mind this has happen. But I do know it is not directed by WMT and it is not tolerated. When WMT finds this happening they do take action including making back pay to the associate.

      I will relate an issue that happen with a friend of mine who was a district mgr. about a year and half ago. His asst. would come in and often go to work without clocking in and often without clocking out. At some point during the week someone would bring this to her attention and she would then fill out a time adjustment sheet but never gave herself over 40 hours even though many times she had work over 40 hours. Because she did this, others felt they might be thought less of for not working over 40 hours and not accepting the overtime.

      Instead of bringing this to the dist. mgr. attention (I guess they felt he was directing her to do this) they called the home office. Later he was demoted for allowing it to happen. Even though he said he didn't know and his asst said he hadn't directed her to do so he was demoted because he should have known. I relate this because it is not something that WMT take lightly."

    We'll accept that story on face value.

    However, would it be fair to suggest that maybe, just maybe, Wal-Mart actually created the environment in which those kinds of offenses take place?

    And by the way, maybe the district manager actually got demoted because he didn’t know what was going on in his own office…




    On the general subject of Wal-Mart, one MNB user wrote:

    Wal-Mart is not driving any one out of business. Consumers are driving others out of business because they prefer to shop at Wal-Mart because of price and selection. Wal-Mart employee pay and benefits are comparable to other non grocery retailers. Most non union grocery retailers pay employees less than unionized grocery retailers. Most unionized companies in many industries ie autos steel trucking etc are seeing dwindling sales due to make-work contract language along with low productivity.

    We don't disagree. Retailers have spent so much imitating Wal-Mart that they've forgotten to offer a compelling alternative.

    Can't blame that on Wal-Mart.

    And another MNB user wrote in about our comment, "With great power, however, comes great responsibility - and this…is where Wal-Mart is accused of skirting the edges of what is ethical and appropriate."

    As a manufacturer who calls on/sells to Wal-Mart, let me share our view. They are the "squeakiest clean" company we deal with. Buyers are not allowed to even take a lunch invitation. Samples may not be left behind for office personnel to take home. Etc. Compare that to the norm in the industry. Expensive dinners. Sporting event tickets. Gift certificates. Golf outings. And so on. I can't speak for other areas of their business, but, in the buying department, as stated above, they are the most ethically pure company we deal with.




    Regarding Randall Onstead's new leadership at Dominick's, one MNB user wrote:

    Give the guy a chance. As we look around the landscape of retail companies, unions and legal counsel that are tasked with managing labor relations I don't see too many people who have cornered the market on world class conflict resolution. A fresh perspective might be just what the situation needs.




    We wrote the other day about how Kmart hopes its new urban, ethnic strategy will bolster its sales over the holidays, and commented that we're not convinced. "We see no evidence of any grand new vision that will propel Kmart into a brighter future," we wrote, prompting one MNB user to observe:

    Once upon a time Kmart was one of my more favorite places to shop. However, many of my personal issues with the store seem to have been a major part of their long term troubles. Prices escalated, variety decreased, inventory was ALWAYS lousy, sale items were almost leftover amounts and sizes, lack of sales personnel and the list goes on.

    During the recent bankruptcy, obviously their stock was at very low levels, and we waited to see what would happen after they emerged. Well, they have emerged, a while ago!

    At least in our local store - inventory levels are still ridiculously low, variety is about non existent, prices are even higher, and unless you are under the age of 25 you can forget buying clothing. Sales associates are still scarce, and the word courtesy still is not part of their vocabulary. Personally, I see no positive changes in Kmart, and frankly the frustration of trying to shop there is just not worth it. Maybe they will do better in urban markets, but it would seem that abandoning suburban markets and relegating older shoppers to bath accessories and curtains is not the way to grow and prosper and certainly not the way to encourage new and loyal consumers.

    But then maybe that is not important, as long as they can pay their execs what the heck!!!


    But not everyone shares our cynicism:

    I have to hand it to Kmart for at least taking a step forward and not just blaming all on Wal-Mart. You may be right they may not make it out alive. I hope they get a lift out of all their effort and ability to be somewhat creative this Holiday Season . They just may have the strength and enthusiasm to prevail. I really want you to be wrong this time.

    This time? Hey, we're wrong lots of times. (Just ask Mrs. Content Guy and the Content Kids…)




    We had a story earlier this week about some of the problems being created for the baking industry by the popularity of low-carb diets, especially the Atkins plan. (We noted that we haven't eaten a slice of bread in two months, and have lost 15 pounds.) As usual, the subject of diet and health generated a number of emails…

    One MNB user wrote:

    Your comment on simply skipping the bread reminded me of what the Hartman Group found in their new report "The Low-Carb Diet and Today's Consumer." Essentially, low carbers use a principle of restriction. Rather than add new foods, they simply cut out entire categories. Dis-assembling a sandwich, and throwing away the bread, is the classic strategy. Wonder how much more bread is going into the garbage at fast food restaurants?

    Anyway, just wanted to give a plug for the Hartman report. When you're out in the trenches trying to provide the right products it's helpful to get a snapshot of what's going on with consumers.


    (And that wasn't even from someone at the Hartman Group…)

    We agree with the "principle of restriction," by the way. It's a lot easier just to cut out a food group or category than it is to start measuring and counting grams and portions…

    For example, as we've moved through the diet, we haven't had a beer for two months…but have added red wine back into our diet with seemingly little impact (as long as we keep exercising). And in addition to bread and beer, we almost completely eliminated all desserts. (We say "almost" because we broke down and ate some fabulous ice cream cake from Cold Stone Creamery on our birthday…what the hell.)

    MNB user Kathleen Whelen wrote to tell us about a company called the Alvarado Street Bakery…

    This bakery from San Francisco is starting to show up here in Stop and Shop, D'Agostino's, Food Emporium and even Shoprite! Their breads are made from whole grains, not flour, and have very low carbs compared to other breads - and they don't taste like tree bark!! Whole grains and sourdough slow down the breakdown of the carbs, so you don't get the big spike. I notice that Arnold's has come out with a low carb bread, which isn't bad as toast, but it's not whole grain and it has a kind of gluey consistency.

    Thanks for the recommendation.

    And MNB user Gary Lind wrote about the "principle of restriction":

    Absolutely true.

    I haven't had a piece of bread for over a year. Even on trips to Italy.

    Amazing.


    And we're sure you look mahvelous…




    And regarding Pepsi's new ad campaign, one MNB user wrote:

    Kevin, I read your daily column for many reasons, although to make me laugh has not been a priority. But today, I laughed out loud when I read that Pepsi's new campaign is expected to focus on Pepsi's compatibility with food.

    Are they kidding??? I can hardly wait to see these ads! That being said however, I have to admit that I watch very little TV (I iron my work clothes while "Bewitched" is on & that's about it) so the whole campaign could come & go without my notice.

    Thanks for being here to both inform & entertain!


    Though not necessarily in that order…




    In our story the other day about Shopping For Health 2003, the newest version of the annual report issued by Prevention magazine and the Food Marketing Institute (FMI), we noted that consumers' confusion about nutrition issues gives retailers and manufacturers a terrific opportunity to become resources for these shoppers. Which prompted one MNB user to respond:

    True, confusion about nutritional issues is a key barrier to healthy buying and eating habits among Americans. However, the key issue creating that confusion is that experts cannot be completely trusted--"45 percent of shoppers strongly agree that during the next five years, it is very likely that the experts will have a completely different idea about which foods are healthy and which are not."

    What can retailers and manufacturers consider "clear and comprehensive
    educational programs" when consumers have noticed that nutrition rules change regularly? It seems the opportunity may be to face complicity in this "deception".


    We think "duplicity" may be the wrong word here. Science changes, and while the pace of change in the modern world is faster than ever before, the ability to communicate information almost instantaneously clearly creates a lot of this consumer confusion.

    Does that mean we should work toward a world in which information is communicated less quickly? Obviously, based on what we do for a living, we don't think so - and it doesn't matter, because that particular genie isn’t going back into the bottle anyway.

    What we think retailers and manufacturers need to do is be up front with consumers about the currency of the information they offer, creating an interactive environment in which people understand and even appreciate the evolution of ideas. (We'd love the opportunity to set up that kind of program for a retailer tomorrow…if you're interested, just call us at 203-662-0100.) If nothing else, changing notions of what works and does not work in this arena could actually create greater credibility and dependence, not less.




    We also had a story the other day about different pieces of research suggesting that it may be genetics or a virus - or, we suppose, both - that cause some people to be obese. These studies and our story - entitled So It's Genes That Prevent You From Getting Into Your Jeans? Or Is It A Virus? - prompted several emails.

    MNB user Denise Remark responded:

    And they say there's nothing new under the sun! What about self restraint? Is there such a gene for that? Perhaps scientists will discover that slender people possess an enzyme that can more effectively metabolize "self-restraint" chemicals in the body. It may even be linked to brain-chemistry, which results from ocular stimulation. I know this works for me because when I see someone who is fat, I realize I could look like that; consequently, I don't reach for every tempting morsel that is placed before me.

    Boy, do I ever sound cranky! But really, loosing weight is not rocket science: Monitor quality & limit what you eat, and exercise regularly. This should work for most people.


    Another MNB user chimed in:

    This is a mark of how much our society has declined in this Atkins/Reality TV era. You are reporting that genetic makeup or viruses are the cause of unhealthy living in America, and the scientists just may be right. It is in my most humble opinion that as a society we would be better suited to allocate some of these fat researchers to some more obvious threats like heart disease and cancer. Brilliant scientific minds should not be wasted on these sort of discoveries, because the accountability for America's obesity problem lies in ourselves and the food manufactures of the U.S. For the wide majority of people, we are fat because of the products we buy and how we consume. This is a problem better suited to be discussed in public dialogue, like the government is trying to encourage. The last thing we need is more Americans with an excuse, saying "The genes made me fat" as they sit on the couch, slamming down their third big mac and a coke.

    I've seen this before...Maybe its a bit too early to say these types of things, but modern American society is looking more and more like Rome before it fell. Circuses are reality TV, Cheap pottery has it's equivalent in Wal-Mart, and our obsession over diets to purge fat is just a modern version of the binge and purge.


    Did you mean to say "wide majority of people"…?

    And, in what may be our favorite letter of the week, another MNB user wrote:

    I can't speak for anyone, but myself. It's my fat ass that keeps me from getting into my jeans. I have a propensity to be heavy, but I know that. So it's all back on me if I let myself go.

    Americans need to quit looking for excuses and start being accountable. Eat less and exercise or simply be more active and most people will lose weight. I know it works for me.

    I know, some folks have medical problems, OK whatever. I have my own medical problems, but I don't use that for an excuse.

    I go up and down like a yo-yo because my metabolism needs constant attention. If I enjoy the wrong foods too much I pay the price. As I get older I tire of fighting the weight, so I enjoy the foods I love with more moderation.


    Spoken like a true veteran of the weight wars…




    And finally, we got this email from MNB user Natalie Berg:

    I am 22-year-old recent college grad now working in Boston. I read your column every day and find it very insightful. However, I was quite disappointed when you referred to a famous Boston pub as Boston BREW Works when it is, in fact, Boston Beer Works.

    Let’s not forget about the retail’s most important vignettes.


    It was 5 a.m. when we made that typo. (Not an excuse, just an explanation.)

    Mea culpa. Mea culpa. Mea maxima culpa.

    We owe you a beer…
    KC's View:

    Published on: November 7, 2003


    • Wal-Mart Stores reported that company sales for the four weeks ended Oct. 31 rose 12 percent to $19.07 billion from $17.05 billion a year earlier.

      Sales for the period at the Wal-Mart division increased 11 percent to $12.72 billion from $ 11.49 billion a year earlier. Sam's Club saw October sales of $2.64 billion, an improvement of 9.7 percent over sales of $2.4 billion in the period last year.

      October same- store sale for the company as a whole were up 4.5 percent.

      For the first 39 weeks of the company's fiscal year, total company sales improved 11 percent to $182.31 billion from $163.81 billion a year earlier.

      Sales for the first three quarters at the Wal-Mart division grew 11 percent to $123.58 billion. At Sam's, year-to-date sales were up 8.7 percent to $24.98 billion.



    • Publix Super Markets posted third quarter earnings that declined 4.4 percent to $136.4 million, attributing the decline to $30 million in expenses related to the closure of its Publix Direct online grocery service.

      Total sales for the period increased 5.8 percent to $4.1 billion, with same-store sales off 0.3 percent.



    • Target Corporation reported that its net retail sales for the four weeks ended November 1, 2003 increased 7.9 percent to $3.374 billion from $3.126 billion for the four-week period ended November 2, 2002. Comparable-store sales increased 1.6 percent from fiscal October 2002.

      While sales at the company's Mervyn's and Marshall Field's units were below plan, sales at Target Stores were on plan for the month, according to Bob Ulrich, chairman and CEO of Target Corporation.



    • Canadian retailer Loblaw Cos. reported that for the third quarter it earned the equivalent of $164 million (US), up from $141 million (US) during the same period a year ago. Sales for the quarter rose seven percent to $5.8 billion (US), up from $5.4 billion (US) a year ago. Same-store sales for the period were up 4.3 percent.



    • Family Dollar Stores reported that total sales for the four weeks ended Nov. 1 climbed 11.3 percent to $378.4 million from $340 million a year ago.



    • Dollar General Corp. posted October sales that were up 11.9 percent to $531.9 million from $475.4 million. Same-store sales were up 3.1 percent.

    KC's View:

    Published on: November 7, 2003


    • Jupiter Research is forecasting that online sales during the coming holiday season will reach $16.8 billion in November and December, up 21.7 percent from $13.8 billion last year. If accurate, this would mean that online sales will account for about 7.7 percent of all holiday spending, compared with 6.7 percent last year.

    KC's View:

    Published on: November 7, 2003

    The Stamford Advocate reports that Wal-Mart is looking to build a two-story, 300,000-sq. ft. retail complex in that Connecticut city that will include a 150,000 sq. ft, supercenter and a Sam's Club of equal size, taking up roughly two-thirds of a proposed combined retail/residential development.

    The facility - which still must be approved by land use boards - would occupy 4.2 acres on what is now an enormous hole in the ground - and will compete with both an existing mall across the street and a new, 200,000 sq. ft. Target Store being built a few blocks away.

    The move is part of Wal-Mart's strategy to open stores in more upscale areas, and to use urban properties more creatively.
    KC's View:
    It so happens we know this plot of land very well. Back in the days when we ran editorial for the old Supermarket Insights video program, our office window looked out on that ugly, gaping hole - and that was well over a decade ago. We suspect that the city fathers will approve the development, simply because they don't have any other options to what has become both an eyesore and a joke.

    That said, we would question what this development will do to traffic on an already overburdened series of streets.

    Published on: November 7, 2003

    Delhaize-owned Food Lion announced that it has signed a deal with Boston Market for an 18-month test that will allow the fast food company to sell home meal replacement products in the supermarket chain's stores.
    KC's View:
    We're not sure that Boston Market is where we'd be looking for cutting edge leadership in the HMR category.

    Published on: November 7, 2003

    Pierre-Olivier Beckers, CEO of Delhaize Group, said yesterday that despite financial constraints the company remains open to making small acquisitions that will "strengthen our network or regional density where we are already present."
    KC's View:

    Published on: November 7, 2003

    Bloomberg reports that an Illinois judge has approved a $12 million settlement by Nestle that addresses several class action claims that its Poland Spring Water isn’t naturally pure spring water from Maine.

    While the debate is over the definition of "spring water," experts say that the controversy hasn’t hurt Poland Spring sales or profits.

    The settlement will provide customers with $8 million in discounts and coupons over five years and requires the company to make $2.75 million in charitable donations.
    KC's View:
    While MNB doesn't exactly have an "official water," we have to admit that our fridge is stocked with bottles of both carbonated and non-carbonated Poland Spring…and it certainly tastes both natural and springy to us.

    Go figure.

    Published on: November 7, 2003

    Reuters reports that just a week after the US Food and Drug Administration (FDA) said it was safe to consume meat made from cloned animals or the offspring of cloned animals, it has decided to take another look at that conclusion.

    The reason: several scientific experts have expressed concern that the FDA is moving too fast, not gathering enough scientific data, and being overly responsive to the wishes of biotech companies that want meat and milk from cloned animals declared safe.

    The FDA report is the first step in a months-long process in deciding whether to allow the commercialization of food from cloned animals. A final policy decision is expected next year.
    KC's View:
    So what are we supposed to believe?

    That the FDA didn’t know what is was doing the first time around, but bowed to pressure? Or that it was right the first time, and now is being pressured to change its mind?

    Either way, this makes you wonder about the credibility of the FDA.

    Published on: November 7, 2003

    Ahold NV this morning revealed a Friday unveiled a $2.85 billion (US) rights issue, new credit facilities and fresh performance targets, as it looks to rebuild its financial credibility and viability after a year in which it has been plagued by an accounting scandal, executive resignations, and declining market share in some of its units.

    Ahold reportedly hopes to use the money raised through the credit facility and rights issue to pay off some of its $13 billion debt.

    The company also said it swung to a first half $68.5 million net profit from a $162 million loss during the same period last year, even as first half sales dropped 12 percent to $34 billion.
    KC's View:
    Ahold keeps saying that it wants to save money through sourcing, infrastructure and operational synergies…but the jury is still out on whether that kind of approach will work in the US, where differentiated and unique divisions have built the company's success here. Will greater centralization lead to homogenization?

    Perhaps Ahold CEO Anders Moberg ought to check out how Safeway has been brought to its knees in numerous markets by policies of centralization, which have clearly distanced the company from the needs of its consumers.

    Published on: November 7, 2003

    A federal judge yesterday sided with the US Food and Drug Administration (FDA), and ordered the shutdown of Rx Depot, a website that specializes in reimportation, or the sale of inexpensive prescription drugs brought in from Canada.

    The FDA maintains that the lack of controls on the Canadian drugs represents a threat to public safety.

    However, the move by the judge and the FDA's efforts fly in the face of increasing public sentiment supporting reimportation. Numerous state and city governments in the US have decided to investigate the process for their own health care systems, hoping that reimportation will allow them to close burgeoning budget gaps.
    KC's View:
    You increasingly get the feeling that FDA is swimming upstream on this issue. For the moment, it has a swimming partner in the federal judge…but it may need a lot more than that if it is to successfully counter public opinion.

    Published on: November 7, 2003

    Reuters reports that bills are being introduced in the US Senate and House of Representatives that would force fast food and chain restaurants to post nutritional information on their menus, including fat levels, calories, and sodium content.

    The bill would apply to any chain with 20 or more units.

    The goal is to provide more and better information to the more than two-thirds of US adults who are overweight or obese and thus at higher risk of heart disease, diabetes and some forms of cancer, though the restaurant industry maintains that lack of exercise is the culprit, not too much fat in food.
    KC's View:
    It isn't either/or. It’s both.

    And frankly, we think fast food restaurants ought to be forced to provide this information. After all, if the stuff isn’t bad for you, they have nothing to be afraid of.

    Right?

    Published on: November 7, 2003

    Forbes.com has an interesting piece that describes the context for the illegal immigration accusations currently being faced by Wal-Mart. Regardless of whether the federal government is able to prove Wal-Mart's guilt, the magazine writes, "the case could very well expose the dirty business of putting illegals to work at big corporations."

    Forbes.com writes:

      "It is believed that 11 million illegal aliens work in this country. They are not all sweeping up at the corner bodega.

      "Call it plausible deniability. A big firm needs its offices or its stores cleaned at night. Preferably on the cheap. The contractor puts in a low bid--and reassures the store owner that no laws will be violated. The contractor hires a subcontractor, who makes similar promises. The subcontractor may hire yet another firm, which employs the workers and hands out the pay. If the workers are busted, the corporate customer at the top can say it is shocked to learn that anything illegal was going on.

      "The problem for the workers at the bottom: Each middleman takes a cut. 'By [working at stores that are] creating these layers to protect themselves, the workers are getting really screwed,' says a federal official who spent years investigating the industry."
    KC's View:
    Wal-Mart maintains that it has no responsibility for the hiring decisions made by sub-contractors. And let's be fair…there isn’t a business in the US that wouldn't make the same argument if facing the same accusations.

    But if it can be proven that Wal-Mart executives knew about the process and ignored it with a wink and a smile, a jury may feel differently.

    Published on: November 7, 2003

    Despite entreaties from a number of food industry organizations, the US Senate voted 58-36 yesterday to oppose efforts by the US House of Representatives to exempt meat products from Country of Origin Labeling (COOL) rules scheduled to go into effect in September 2004.

    The effective result of the Senate vote is that the US Department of Agriculture (USDA) will be forced to continue the process of developing regulations that are consistent with legislation requiring COOL.

    The Associated Press notes that the effort was led by senators from western states. "If we can decide the difference between choice and prime we can decide the difference between Mexico and the United States," said Senate Democratic leader Tom Daschle of South Dakota. "This may be one of the single most important consumer bills that our Congress is going to take up in this session."

    At the same time, the Senate opposed a proposal by USDA to allow Canadian beef back into the US early next year, ending a ban initiated when a single case of mad cow disease was found north of the border.

    In a statement yesterday afternoon, the Food Marketing Institute (FMI) reacted angrily to the Senate resolution. “Today’s Senate resolution to move forward with country of origin labeling (COOL) for meat is a step backwards for the very cattlemen this program is supposed to benefit,” said John Motley, senior vice president of the Food Marketing Institute (FMI).

    “The sense of this Senate resolution is nonsense,” Motley said. “At a first-year cost of up to $3.9 billion and with no assurance whatsoever that COOL will increase sales of any of the products it covers, the law itself should be repealed. At the very least, implementation should be delayed for all the products covered, including fresh and frozen produce, seafood and peanuts.”

    Motley said, “COOL will undermine the market for meat in North America, where products are moved freely across borders. The law requires labels to declare each country on meat from livestock that spent time in multiple countries (e.g., born in Mexico, raised in the U.S., slaughtered in Canada). To limit the confusion, retailers will source products from as few countries as possible and, where feasible, from a single country — and not necessarily the U.S. — thereby undermining the law’s intent to promote sales of U.S. products."
    KC's View:
    We've been doing some casual, highly unscientific research lately, asking a number of people about their opinion of COOL requirements. While almost nobody has said they thought this was a pressing need, they have said that is view of security issues, they think it sounds like a pretty good idea.

    We would agree…but think that clearly some fresh thinking needs to go into implementation issues. We believe that both sides need to consider this issue further, and come up with a compromise that works better for all parties…with a main component being that manufacturers bear more responsibility for the labeling than retailers.