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    Published on: January 23, 2004

    The nights have been cold here in the frozen tundra that is Connecticut, which means that some wonderful red wines have been a source of comfort and warmth.

    There are three that we've really enjoyed, part of what our wine merchant calls his "Ski House Reds" flight…

      • A 2001 Lockhart Merlot, which has this great combination of vanilla and fruit and is a pretty lively glass of wine.

      • A 1999 Chathom Vineyards Cabernet Sauvignon, which went great with lamb and steak…big and full and spicy.

      • Our favorite of the three was a 2000 Bishop's Peak Zinfandel, which was simultaneously dry and fruity - with cranberry the flavor that dominated. Yum! (Now, we should say that when we opened this bottle, we were with Mrs. Content Guy, our Marketing Guy Jim Roxbury, and Mrs. Marketing Guy. The opinion was split on this one - the guys liked it, the women not so much. But that might just be us…)

    Great stuff. If you want to find out more about these wines and how to buy them, go to:
    KC's View:

    Published on: January 23, 2004

    MNB user Bob Vereen filed the following report from Indiana:

    Wal-Mart very quietly opened a new 213,000 sq. ft. supercenter 5 minutes from our house in Avon, Indiana, yesterday. We dropped in for a visit today.

    Really a handsome store. Excellent, broad assortment in the food side. We frequently shop at a Meijer supercenter about a mile or so away, and thought the aisles at Wal-Mart were much wider; the assortments broader, the organization of the stock, easy to shop.

    I heard a rumor they did nearly $350,000 in the first day--with no publicity on the opening, no advertising, just a sign on the front saying GRAND OPENING.

    They also have a gas station there, so I filled up and saved 3 cents a gallon over the nearby Meijer.

    It will be interesting to watch.

    Regarding yesterday's report that the cost of obesity-related health care in this country $75 billion, with people who actually are obese paying less than half that, MNB user Mike Martin wrote:

    Make the fat pay! I work hard to stay healthy and physically fit, by exercising and a proper diet.

    Why should my tax dollars be applied to the cost of health care for people who CHOOSE a sedentary lifestyle and over indulge in the consumption of food?

    People who smoke and/or are obese should pay higher health care premiums. Much like a driver with a history of speeding tickets, pays higher insurance premiums. Better yet, offer tax credits to those who maintain a healthy lifestyle.

    On the broader subject of obesity in this country, MNB user Randal O'Toole wrote:

    I am very skeptical about anything the Centers for Disease Control says about obesity. To gain public attention (and increased appropriations), they have manufactured a crisis out of very little evidence.

    The widely cited survey that supposedly shows we are getting fatter is an annual unverified telephone poll asking people (among other things) their height and weight. The people running the survey do no statistical analyses to see if their results are reliable.

    But one piece of information shows that the results are not reliable. The first year they did the survey (1985), they found that 12 percent of Americans were obese. At the time, actual measurements of a random sample of thousands of Americans had found that 22 percent were obese. So, they assumed that lots of people lied to pollsters about their height or weight. In the last year of the survey, they found that 20 percent were obese. Does that mean fewer people are lying? Or does it mean the real obesity rate has increased by two thirds to 36 percent? Without verification, CDC assumes the latter. I am dubious.

    Later some CDC "scientists" put out a report, based on the flimsiest of evidence, claiming the suburbs cause obesity. The evidence was the same unverified survey, and it showed that people who live in cities exercise and average of 40 seconds more a day than suburbanites. Even if true, 40 seconds a day doesn't make much difference, certainly not enough to lead planners to force dramatic changes in suburban land-use patterns (which was the goal of the report).

    Now CDC says obesity costs $75 billion. This is a silly number because it fails to take into account the health care cost of NOT being obese. Data clearly show that people who are healthy live longer lives than people who are obese. If you are not obese, you are more likely to spend your last years in a nursing home whose expense could greatly outweigh the cost of obesity. Yet I doubt that CDC will put out a hysterical report about the cost of being healthy.

    Also on the subject of obesity, one MNB user wrote:

    The main point for any successful weight loss plan (low cab or low fat) doesn't really seem to get stated enough. Eat less (choosing a wide variety of foods - fruits, veggies, meats, whole grains) and move more. Period.

    Sounds so easy but it never seems to make the bestseller list when it comes to diet books. And it's certainly not that easy to follow when you're bombarded by really horrible food choices from a very early age. (Why haven't we seen the Cheetos diet yet?). And everyone's looking for a quick fix.

    It's nice to see Atkins and South Beach doing well and actually changing the face of the grocery aisles a bit. But I can already see that the changes are beginning to confuse shoppers and the choices are becoming much like those in the rest of the store - chemical filled, sugar-free with questionable nutritional value if eaten as a sole source. I am reminded of Snack Wells and how they took off during the height of the low fat era. Well, they were loaded with sugar and people assumed they could eat as many as they wanted and everyone continued to get fat.

    It seems it's still about the competition for the consumer's dollar at the expense of common sense and their health.

    MNB user Patrick Sullivan of the Physicians Committee for Responsible Medicine, wrote:

    Since you've devoted some recent coverage to controversy about the safety of the low-carbohydrate diets (Dec. 9) and the Food and Drug Administration's move to define the meaning of "low carbohydrate" (Jan. 22), we thought you and your readers should know that a new scientific review has drawn a clearer link between low-carb diets and cardiac arrhythmia.

    As you know, cardiac arrhythmia killed Rachel Huskey, a 16-year-old Missouri girl who was on a low-carb diet. Now, a paper appearing in the current issue of Asia Pacific Journal of Clinical Nutrition offers additional scientific support for tying such deaths to low-carb diets. This extensive review of the scientific literature is titled, "Low-carbohydrate diets: what are the potential short and long-term health implications?"

    Shane Bilsborough, lead author, has stated, "There is a growing concern now among doctors that cardiac problems seen on low-carbohydrate diets are the reason for sudden death seen in otherwise healthy dieters who cut out carbohydrates from their diets."

    Moreover, low-carb dieters have reported an alarming number of such incidents to our organization, the Physicians Committee for Responsible Medicine. Since the news conference described in your Dec. 9 article, PCRM has collected 27 accounts of life-threatening cardiac events experienced by low-carb dieters.

    These facts should give pause to anyone in the food business. As science takes a closer look at health problems linked to these popular diets, what kind of ethical, legal, and public relations problems will bedevil companies who jumped on the low-carb bandwagon before the facts were clear?

    Points well taken.

    Yesterday, we had a letter from an MNB user suggesting that an FMI workshop on "How To Keep Your CEO Out Of Jail" would be better attended if it did a seminar on "How To Put Your (Former) CEO in Jail," which, he said, would be embraced by Fleming, Ahold, and Kmart employees. That struck us as a little harsh. Funny, but harsh.

    Another member of the MNB community wrote:

    Bitterness is one thing but mistrust once broken never comes back to center. It may after time be repaired but leadership failed people, shareholders, and communities. Saving / cutting into the future has never been a sustainable model nor a compelling vision to follow. Lessons will be learned on the backs of people within the company until good leadership arrives.

    MNB user Glen Terbeek sent us the following email:

    There is a great editorial in the WSJ today by my favorite strategy guy after you, Gary Hamel. It is entitled "When Dinosaurs Mate". It is worth a read, in light of the mega mergers in the food industry.

    Two great quotes in it:

    1) "As management's attention turns inward, customers lose out and market share wane."

    2) "Put simply, you don't get a gazelle by breeding dinosaurs."

    After reading today's MNB alone, think about Safeway, Ahold, even Spartan. What are they thinking? The shopper only cares about the stores in her/his marketplace.

    Isn't it true that not only were dinosaurs big and slow moving, they were also too dumb (or impressed with their size) to change with the environment?

    The beat goes on!!!

    True. True.
    KC's View:

    Published on: January 23, 2004

    • Winn-Dixie Stores, Inc. appointed Brad Spooner as Division Manager of its North Florida Division, effective immediately. He most recently was the company's Senior Director of Operations.

    KC's View:

    Published on: January 23, 2004

    Interesting column by Tom Moroney in the MetroWest Daily News that
    details how Wal-Mart limits the sale of lithium batteries because lithium is an ingredient "used in the illegal manufacture of the drug, methamphetamine, or crystal meth."

    According to Moroney, "The fact that addicts were cooking up their own crystal meth became such a problem that federal officials went to Wal-Mart in 1997 asking for help. The giant retailer responded by putting the batteries in the so-called 'register prompt system,' or master list."

    This master list contains a number of products that Wal-Mart puts sale limits on, for a variety of reasons. The company won't say how many items are on the list, just that it is "evolving" with products "being added at all times."

    For example, here is also a limit on packages of cold remedies containing pseudoephedrine, also used to make crystal meth.

    Moroney writes, "In addition to limiting purchases, Wal-Mart encourages its clerks to closely monitor people buying such items. Two years ago, it paid off. An alert Wal-Mart clerk in Kentucky reported to her supervisors a woman buying four boxes of Sudafed. Police followed the woman and discovered she was a meth cooker who had been involved in a homemade lab explosion that killed her son. She was booked for murder."

    However, Moroney raises an interesting point. How come Wal-Mart doesn’t limit sales of fertilizer, which was used as an ingredient in the bomb that was used in the Oklahoma City?
    KC's View:
    This isn't a criticism of Wal-Mart. At least, not by us. It's just an observation that ultimately is about how complicated a world we live in.

    Published on: January 23, 2004

    The Boston Globe reports that federal investigators have joined the investigation into CVS Corp. and payments it reportedly made to a pair of Rhode Island legislators who blocked the passage of a law that the company opposed.

    The legislation would have eliminated what the Globe termed lifted as CVS's "near-monopoly over prescription medications covered by insurance."

    CVS already has conceded that it made "errors in judgment" and that it is changing its policies to ban paid consulting agreements with elected officials.
    KC's View:
    Somehow, the notion that any company could have a paid consulting agreement with an elected official is rather quaint.

    Published on: January 23, 2004

    The Associated Press reports that Florida's citrus industry has decided to spend almost $2 million to counteract the negative impact that low-carb diets have had on the consumption of orange juice.

    Abandoning an ad campaign aimed at young and professional women, the $9 billion industry instead is going right after what it terms the "powerful, negative messages" that it feels are discouraging the consumption of orange juice. This isn't just perception; consumption of orange juice fell from 888 million gallons two years ago to about 844 million gallons last year.

    Chief among the industry's targets are Dr. Phil McGraw and the Atkins Diet, which the citrus industry says allow consumption of orange juice despite popular perceptions to the contrary. It is considering a lawsuit against the authors of "The South Beach Diet" for discouraging orange juice consumption because of its high level of sugar.
    KC's View:
    Out of curiosity, we did a quick search of the Atkins site this morning, and found an interview with the late Dr. Robert Atkins in which he said, "Orange juice has a very high glycemic index, meaning the glucose enters the bloodstream very quickly," and suggested that such products "should be avoided."

    That doesn't sound like permission to us.

    That said, we have to admit that when we've tried Atkins, orange juice and oatmeal - two foods that always were said to be healthy - were among the things we missed the most.

    Published on: January 23, 2004

    Tesco, the UK's biggest food retailer, reportedly is buying Adminstore, a 45-unit, privately held English convenience store chain that operates in Central London under the Europa, Harts and Cullens banners. Terms of the deal were not disclosed.

    This is clearly part of the Tesco strategy. It was more than a year ago that the company acquired T&S, another UK c-store chain, boosting its Tesco Express group of stores by more than 800 units.

    Tesco said it will convert all the Adminstore units to the Tesco Express banner.
    KC's View:
    We've always been impressed with the Tesco c-store operation, and how in certain cases these small stores generate as much revenue as a full-service supermarket. In some cases, this is a matter of location; in others, it is just canny merchandising.

    Either way, it works.

    Published on: January 23, 2004

    Eastman Kodak Co. announced yesterday that it will eliminate close to 25 percent of its workforce, or between 12,000 and 15,000 jobs, as it transitions from the film business to the digital photography business.

    "We've got good momentum, particularly in our digital portfolio," which turned a profit for the first time in 2003, CEO Dan Carp said yesterday. "We can see now into the future and have scoped out a three-year plan to ensure we stay ahead. We believe 2003 marks the bottom, and we'll build on our performance going forward.

    Kodak's digital businesses generated 30, percent of the company's $13.3 billion in 2003 sales, though it expects that it will account of almost two-thirds of its business by 2006.

    The layoffs will take place over the next three years.
    KC's View:
    Okay, maybe "eviscerates" is a little strong. Especially since analysts and the stock market seem to think this is a necessary move…even though Kodak's ability to be to the digital category what it has been to the film business is dubious at best, if only because there is so much competition.

    But 15,000 jobs!

    Published on: January 23, 2004

    Published reports say that French retailer Casino has decided not to pursue a bid for a joint acquisition of Dutch retailer Ahold's troubled Argentine unit, Disco SA.

    Casino was considering a bid to be made jointly with Francisco de Narvaez, a local businessman, who reportedly could become a sole bidder for the Disco unit. No explanation for the Casino withdrawal was offered.

    De Narvaez has made a political issue out of the future of Disco, using a media campaign to call for local control of the company if it is sold by Ahold. At the same time, Disco has endured legal and tax troubles in the region that made its sale more problematic.
    KC's View:

    Published on: January 23, 2004

    Democratic presidential candidate John Kerry, having won the Iowa caucuses and with polls showing him in the lead in the days before the New Hampshire primary, has added the import of prescription medicines from Canada to his stump speech.

    "I will repeal the ban on reimporting drugs from Canada," he says. "Prices there can be to 80 percent lower for the same drug. The only reason George W. Bush opposes this is because the drug industry would lose billions in excessive profits. I believe its time for a President who cares less about profits than about patients."

    The subject of drug reimportation has become something of a political cause of late, with its practice supported by several states and municipalities that believe they can use the savings to close enormous budget gaps. Reimportation is banned by federal law on the basis of concerns that such drugs have not been put through the rigorous testing used here in the US; however, the US Food and Drug Administration (FDA) has not yet filed suit against the government entities engaged in its practice, though it has said that such action is a possibility.
    KC's View:
    It has surprised us that reimportation hasn’t been more of a political issue, considering that it is a presidential election year. We continue to believe that the federal government won't go after states and cities importing drugs from Canada until after the elections in November.

    There's no percentage in it until then.

    Published on: January 23, 2004

    In Tampa, Florida, Wal-Mart has opened its first urban supercenter - a 99,000 sq. ft. prototype that features a somewhat edited SKU selection, the HBC department near the front door, and a dual-lane, drive-through pharmacy.

    According to reports, the store has deeper, higher shelving that allows it to cram more merchandise into the smaller footprint.
    KC's View:
    It is a measure of the cynicism with which Wal-Mart is perceived by some people that one member of the MNB community sent us an email noting that, at 99,000 sq. ft., the store is smaller than the 100,000 sq. ft. that is usually used as the cutoff point in legislation banning "big box" stores.

    Coincidence? At least one of our users thinks not.

    At the very least, it is an interesting notion.

    Published on: January 23, 2004

    Two consumer groups - the Environmental Working Group and the Center for Environmental Health - have filed notice of their intent to sue 50 salmon farms, fish processors and supermarket chains for what the groups say is the failure to warn consumers about potentially dangerous levels of cancer-causing chemicals.

    The retailers targeted by the suit include Safeway, Kroger, Albertsons, and Costco.

    The suits would be filed under a California anti-toxics law - Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986 - that requires companies to notify consumers about products with hazardous levels of chemicals known to cause cancer or reproductive harm. The California Attorney General now has 60 days to decide whether to join the suit.

    The actions build on a study that maintains that farm-raised salmon contains significantly more contaminants than salmon caught in the wild because of PCBs.

    "Our goal is to challenge them to change their practices so their fish is safe to eat," said Michael Green, executive director for the Oakland-based Center for Environmental Health.

    Representatives of farmed salmon businesses dispute the claims, saying that research shows that the benefits of farmed salmon outweigh the possible risks, that farmed salmon is available year-round and is cheaper than wild salmon.
    KC's View:
    It is interesting that the chains are being targeted in this suit, considering that - at least to this point - food retailers have not been held culpable in tobacco suits and obesity suits.

    A new trend in litigation? Retailers better hope not.

    Published on: January 23, 2004

    The US Congress has voted to delay implementation of Country of Origin Labeling (COOL) regulations until fall 2006, bowing to lobbying pressures by food retailers and the meat industry, which say they are crafting a more efficient and effective voluntary system.

    The vote was part of a $375 billion government spending bill passed yesterday. President Bush is expected to sign the legislation, and the administration supported the delay of COOL implementation.

    However, the debate may not be over. Democratic Leader Tom Daschle said he would try to overturn the delay, and he is supported by groups such as Public Citizen and the National Farmers Union. The argument against a delay suggests that COOL regulations are even more important because of the discovery of a single case of mad cow disease on US soil, in a cow that originated in Canada.

    Congress had passed a law two years ago mandating COOL regulations be in place by September 30, 2004, on red meat, seafood, fruits, vegetables and peanuts.
    KC's View:
    Where we agree with retailers is the notion that manufacturers ought to be responsible for record-keeping, not retailers.

    But we continue to feel that industry is being short-sighted in opposing COOL. It may not matter, but it runs the risk of being perceived as anti-consumerist. Unless, of course, the voluntary system is broadly implemented and effective…in which case we will be proven wrong. (And not for the first time.)

    Published on: January 23, 2004

    Local news reports in the Grand Rapids region as well as MNB sources say that Meijer plans a series of substantial layoffs.

    One source told MNB that more than a thousand people could be laid off, though that figure could not be confirmed.

    Channel 8 News in Grand Rapids reports this morning that "managers were called to a meeting this morning. At that meeting, they were told, beginning tomorrow at 8:00 am, store directors would call individual managers into the office. If they are called in, they'll be told they are being let go and informed what, if any, severance package they'd be offered. The process should take about two days."

    Meijer is not commenting on the reports.
    KC's View: