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    Published on: March 17, 2006

    Robert Miller, the former chairman/CEO of Fred Meyer and vice chairman/COO of Kroger as well as the current chairman of both Wild Oats and Rite Aid, has been named CEO of the 655 Albertsons stores being acquired by an investment group led by Cerberus Capital Management.

    These stores currently generate more than $10 billion in annual sales. The chain will continue to be headquartered in Boise, Idaho,

    "I am excited that I will be back in the grocery business, in areas I am familiar with from my past," said Miller. "Our goal will be to build a successful operation by focusing on what is important to our customers in each market. I have spent time working in each of the regions we will be operating and I am looking forward to getting into the stores and meeting our associates and customers."

    While some analysts believed that Cerberus was acquiring the Albertsons units primarily as a real estate play, Cerberus management says it plans to run the stores and turn the company into a profitable chain.

    Miller reportedly will continue as chairman of Rite Aid even after he takes on his new role, though he will step down from the Wild Oats job. The acquisition of the Albertsons stores is expected to close in mid-2006.
    KC's View:
    Stock market analysts seem to think that by hiring Miller as chairman of the Albertsons stores, Cerberus is setting itself up to make a bid for Wild Oats, his soon-to-be former employer. That may make sense…but then again, Wild Oats has been rumored to be for sale for years…so we’ll see.

    Published on: March 17, 2006

    The Japanese government said this morning that it has confirmed the 24th case in the country of bovine spongiform encephalopathy (BSE), the brain-wasting disease better known as mad cow disease.

    This cow, however, was the first cow that was raised to provide meat to humans. The other 23 were dairy cows.

    Unlike other countries – like the United States – Japan tests every cow for BSE.

    It has been an exceptionally busy week on the BSE front. It was just earlier this week that the US Department of Agriculture (USDA) confirmed that a cow in Alabama tested positive for BSE, the third cow in the US confirmed to have had the disease. The new BSE discovery came at a bad time for the Bush administration, which has been trying to convince the Japanese government to reopen its borders to US been imports. Those borders were closed when the first case of mad cow was found in the US in December 2003, and then reopened late last year, only to be closed again early this year when beef containing spinal matter – specifically banned by the agreement reopening the border – was found in a Japan-bound shipment.

    Then, despite the new discovery, USDA announced that it plans to scale back the expanded BSE surveillance program that was begun after the first case of mad cow was found in Washington State in December 2003. Reports earlier this week suggested that the Bush administration had been planning to scale back testing if it could get through the winter without a new case, and the latest case of BSE prompted many to speculate that USDA would have to cancel those plans.

    While some consumer groups have called for even greater testing – with some believing that the US should follow the Japanese model and test every cow – the beef industry has called such proposals costly and unrealistic.

    Before expanded testing went into effect, about 55 cows were tested each day, and that the enhanced program tested about 1,000. When the cutbacks take place, it will reduce the number of cattle being tested each day to roughly 110.
    KC's View:
    We’re thinking that it seems likely that cows will fly before Japan decides to allow US beef back into the country, unless political considerations trump food safety concerns.

    None of this makes any sense.

    Just do the math. Japan tests every cow and fins 24 cases of BSE. We test just a small percentage of our cattle, and we only find three.

    Is our meat supply that much superior? Or are we just not finding more BSE cases because we’re not looking hard and far enough?

    Published on: March 17, 2006

    President Bush has nominated Dr. Andrew C. von Eschenbach, currently serving as the interim commissioner of the US Food and Drug Administration (FDA) as well as full-time head of the National Cancer Institute (NCI), to be permanent chief of the FDA.

    However, as the New York Times reports, Senator Hillary Rodham Clinton (D-New York) and Sen. Patty Murray (D-Washington) have promised to use parliamentary procedures to hold up any confirmation vote because of how FDA has delayed for some three years making a decision about proposed over-the-counter sales of Plan B, an emergency contraceptive known as the "morning-after" pill.

    In a statement this week, the two senators said that “the American people deserve an FDA that sets the gold standard in drug approval. The FDA under this Administration has squandered that trust and the over the counter application of Plan B is a case in point. For more than two years, the FDA has dragged its feet on making a decision, putting ideology over science. It is past time for the FDA to stop dragging its heels and make a decision on Plan B. We will place a hold on the nomination of Dr. von Eschenbach until the FDA issues a decision on Plan B, yes or no.”

    The Times suggests that a delay could last years, and could potentially hamstring FDA’s ability to make necessary decisions. “The fight comes as the FDA faces difficult decisions about how to track the safety of drugs and medical devices after approval, how to balance competing demands between speedier access to drugs and more information about their safety, and how to approve generic versions of expensive biotech drugs,” the NYT writes. “Some agency observers say that only a confirmed commissioner can make such decisions. Political observers nonetheless predict a stalemate.”

    Norman J. Ornstein, a scholar at the American Enterprise Institute, told the NYT that “the Bush administration would allow Dr. von Eschenbach's nomination to languish for years before doing anything that would anger its allies in the anti-abortion movement, as an approval for Plan B would.”
    KC's View:

    Published on: March 17, 2006

    The Seattle Post-Intelligencer reports on an authenticity flap that has emerged over Picasso drawings being sold by Costco Wholesale on its website.

    Costco has pulled from its site the Picasso drawing “Picador in a Bullfight” that was listed for $145,999.99 when concerns were raised by Picasso’s daughter about the authenticity certificate that accompanies it. Costco CEO Jim Sinegal says that the company thoroughly researched the drawing’s authenticity, but “"that doesn't mean we're infallible."

    Similar questions have been raised about two other Picasso drawings sold by Costco, and Sinegal said that if the artworks prove to be inauthentic, the customers will have their money refunded.
    KC's View:
    We like the way that Sinegal is dealing with this issue, which is emblematic of how he deals with everything. He says 1) we did our best, 2) it is possible we may have screwed up, and 3) if we screwed up, we’ll fix it.

    Which is why people trust Costco.

    Picasso once said that “art washes away from the soul the dust of everyday life.” Sometimes we think that the goal of retailers like Costco – and others that include Wegmans, Ukrops, Dorothy Lane, Andronico’s, Starbucks - is to wash away the dust of everyday retailing.

    Seems like a pretty good business model to us.

    In fact, maybe we’ll adopt this as our new marketing slogan…

    MNB Washing Away The Dust Of Everyday Punditry”

    Published on: March 17, 2006

    The UK’s largest online supermarket chains - including Tesco, Wal-Mart’s Asda Group, Sainsbury, and Waitrose – have completed an agreement with the country’s Office of Fair Trading (OFT) to clarify the pricing of products sold on their websites.

    The OFT reportedly received a number of complaints from consumers saying that prices they were being charged were not the same prices that were being advertised on the retailers’ websites. In fact, this wasn’t an accident – customers were being deliberately being charged the price that was listed in-store when the order was assembled, and the online prices were just a guide for consumer purposes.

    Under the new agreement, the supermarkets will make this policy clearer, and promised to guarantee that special prices advertised online will hold firm, regardless of the price listed on store shelves. In addition, OFT said that consumers are not contractually bound to accept the order until they have satisfied themselves that they have been charged appropriate prices.
    KC's View:
    This one caught us by surprise. Maybe it is a British thing, but the idea that a consumer would be charged anything other than the advertised online price, and that the chains would view online prices merely as a “guide,” just seems ludicrous.

    Taking that kind of flexibility to the next step, one could argue that prices could be changed between the time an in-store customer picked a product up off the shelf and walked to the checkout lane. Not that retailers wouldn’t mind having that kind of elasticity, but it would do a number on credibility.

    Though this seems to happen in the gasoline business, at least to an extent. Both of our cars needed fuel yesterday, so we drove Mrs. Content Guy’s Honda Pilot down to the gas station and paid $2.51 per gallon. Drove it home, and about an hour later brought our Miata to the same station…and paid $2.63 per gallon.

    We’ve been checking the papers and the Internet, and haven’t quite figured out what the natural disaster was that caused a 12-cent price increase in 60 minutes. Though, mark our words, at some point we’re all going to see oil company executives blame fuel price increases on the rising cost of fuel – they’ll say that it just costs more to deliver gasoline to all those stations.

    But we digress…

    Published on: March 17, 2006

    Valassis Communications has settled charges brought against it by the Federal Trade Commission (FTC) claiming that the free standing insert (FSI) producer colluded with News America Marketing, which is its major FSI competitor.

    The charges detailed how, during a July 2004 conference call, Valassis detailed its plans to raise prices and invited News America to do the same – essentially eliminating an ongoing price war. The problem was that this violated federal antitrust laws.

    “Collusive agreements to fix prices or allocate markets are condemned by the antitrust laws,” said Jeffrey Schmidt, Director of the FTC’s Bureau of Competition. “The action taken by the Commission today demonstrates that the FTC will protect consumers by challenging, in appropriate circumstances, invitations to collude before the invitations are accepted and become agreements to fix prices or divide markets.”
    KC's View:

    Published on: March 17, 2006

    Drug Store News reports that Craig Fuller, a former official in both the Reagan and first Bush administrations, is resigning under pressure from his post as president/CEO of the National Association of Chain Drug Stores (NACDS).

    Fuller apparently is being blamed by his constituency for taking a conciliatory approach to Medicare reform, which some believe has hurt community pharmacies disproportionately.

    An official announcement is expected as early as today, and there remains a possibility that NACDS COO Bill Sittman also may resign.

    Drug Store News says that there seems to be no agreement on who will replace Fuller in the job, and that it is hard to know whether the board will seek someone from the industry or someone identified as a Washington insider.
    KC's View:

    Published on: March 17, 2006

    • HE Butt Grocery Co. has recalled its entire private label line of baby food after pieces of glass were reported to have been found inside several jars. There were no reports of injuries.

    • Safeway last night received the 2006 Catalyst Award, which each year honors strategic business initiatives that result in the recruitment, development, and advancement of women in the workplace.

    Other recipients this year were BP and the Chubb Corporation.

    Safeway was honored in part for its diversity initiative that “features comprehensive career development and mentoring programs combined with rigorous tracking and accountability systems, which have resulted in the substantial advancement of women—including women of color—to management positions. Safeway seeks to promote management talent from within, drawing from all levels, including entry-level store employees, to fill its leadership ranks. The many facets of Safeway’s initiative are fundamentally linked to Safeway’s efforts to remain a competitive employer of choice in its industry.”

    • Coca-Cola reportedly will begin rolling out its new carbonated cola-and-coffee fusion drink, called Coca-Cola Blak, in the US starting on April 3. The product is a reformulated version of a product already launched in France.

    • Bob Spengler, recently retired President of Modesto-based Save Mart Supermarkets, was inducted this week into the California Grocers Association (CGA) Educational Foundation Hall of Achievement. Spengler was recognized for his years of service to the California food industry by more than 450 of his food industry peers who attended the induction dinner.

    • The Body Shop, the UK-based retailer of natural beauty products, is being acquired by L'Oreal SA for the equivalent of about $1.14 billion (US). Analysts say that the move, in addition to putting new marketing muscle behind the Body Shop brand, also will give L'Oreal an expanded retailing presence through Body Shop retail locations.

    KC's View:

    Published on: March 17, 2006

    On the subject of mad cow disease, MNB user Steven Ritchey wrote:

    I hope it never comes to this, but one sure way to get the USDA or the Bush Administration to advocate the testing of every cow would be for someone in Congress, the Bush Administration or someone close to them to contract the disease. Don’t get me wrong, I’m not saying I want this to happen, I wouldn’t wish it on anyone, but it would bring the problem close to home.

    Sometimes we get emails from people who have relatives who have suffered from the human variant of mad cow, and these people have gone through so much agony. We can’t help but feel that this disease is simply too abstract for many of us, and that’s why it doesn’t get enough attention.

    Another MNB user wrote:

    My father was/is involved in agriculture all his life, in business, farming and internationally. When the last US border closing to Canadian beef happened, Agriculture Canada made a presentation to the US Ag people demonstrating MANY cases of mad cow that had taken place on US soil over previous years. It is also a statistical joke to believe that with an infection rate of any number at all and the millions of cattle in the US that there are only 3 cases….. No wonder it is difficult to believe USDA.

    Another MNB user wrote:

    Well, it sounds like the USDA is now being run by FEMA. This also gives= the public a vote of confidence on how the government will handle & protect us from the avian flu.

    Responding to yesterday’s MNB Radio piece in which we admitted to having a crush on Rachael Ray, MNB user Marv Imus wrote:

    Now that’s an admission I could make ! I LOVE Rachael too ! And the only thing my wife would do is roll her eyes ! Though I have to admit a certain amount of that same passion I have for Emeril ! My first channel I flip to after CNBC is always the Food Network, even before ESPN, or even Spike…

    Thanks for starting the NewsBeat Radio. I enjoy hearing you speak with your passion as well as read you words.


    Another MNB user wrote:

    I like Rachel Ray, too. She educates me by taking seemingly complicated meals and breaking them down into steps I can handle.


    KC's View:

    Published on: March 17, 2006

    Read a really interesting book by journalist Craig Crawford entitled “Attack The Messenger,” which is about how both political parties successfully have managed to avoid accountability for their actions by blaming the media for being obsessed with bad news. What really makes the book work is that Crawford acknowledges that the media isn’t perfect, and makes suggestions for how it could restore its own credibility. (Should reporters make a point of telling people how they vote, so at least the words “hidden agenda” could be taken away as a weapon against the press?)

    It is an excellent, well-thought out piece of writing – and timely, since I read yesterday how the American Meat Institute (AMI) apparently is blaming the media for all the controversy surrounding the use of a carbon monoxide as a pigment fixative. That’s a perfectly typical thing to do, since by blaming the media, the AMI can try to avoid dealing with the fact that using any chemical as a pigment fixative leaves a bad taste in consumers’ mouths.

    Granted, I have a horse in this race. I am, after all, a member of the media – and I know people in this industry who think that I’m out to get them and that I am seldom correct in my analyses.

    Which is fine. Seems to me that one of the beauties of MNB is that everybody’s agendas are pretty much on the table – especially mine.




    If it comes to your city, or if you happen to come to New York, try to make a point of seeing the musical, “The 25th Annual Putnam County Spelling Bee,” which is a simply delightful musical currently playing on Broadway. Mrs. Content Guy and the Content Kids were all on holiday from school this week, so I splurged on five tickets to the theater – which these days is almost like making an extra mortgage payment! But it was worth every penny – “Spelling Bee” is laugh-out-loud funny, the music is bracing, and it was a wonderful family evening at live theater…which, every time I go, reminds me that it is my first love.




    I know I should lay off Barry Bonds, but it is hard. Very hard. He’s a bum who has consistently cheated, who is unrepentant, and who demeans the greatest game in the world by his very presence.

    But you’re probably getting tired of my rants.

    So here’s what I’ll say this week. If you want an object lesson in how not to lead, just watch Bud Selig, the commissioner of baseball, who proves with almost every passing day that he has almost no respect for the traditions and integrity of the game, and the feelings of most fans. You can almost imagine him, huddled in his office, hoping against hope that the steroid controversy will go away or that people will lose interest. That’s not leadership. That’s not even management.

    If anything, it is malpractice.

    By the way, I have a question about the steroid controversy.

    Everybody keeps writing that baseball can’t penalize Bonds because, while steroids were illegal in the real world, they had not been banned by the lords of baseball.

    So here’s my question.

    Since when do the rules of baseball supersede those of society?

    Selig ought to suspend Bonds pending the results of an internal investigation into illegal steroid usage, and then hire Rudy Giuliani to conduct a fast, one-month probe into steroid usage by Bonds and his peers. And, he ought to make a public declaration that if any player is found to have used steroids during the time that he compiled any statistics that eventually contributed to a record, then those statistics are immediately null and void. End of story, no debate.




    Wonderful cover story in this month’s Wine Spectator about the new Italian cuisine…which is anything but spaghetti and meatballs. The chefs who are creating this cuisine “may not faithfully reproduce the dishes one finds in Italy, but they get to the essence, achieving the simplicity and mining the endless variety of flavors and textures.” Read the story, enjoy it, and then watch the DVD of Stanley Tucci’s “Big Night,” which uses the same subject as a theme in his brilliant meditation on the difference between commerce and art.




    Wine of the week: from Spain, a 2004 Bodegas Mustiguillo “Mestizaje,” which is a rich red wine that goes great with flavorful, grilled meats.




    Happy St. Patrick’s Day…and, as always…

    Sláinte!!

    KC's View:

    Published on: March 17, 2006

    New, from the Editors of Men's Health and Rodale, Inc, is Best Life magazine. This new publication targets the growing segment of affluent males in their forties.

    Best Life encompasses all aspects of a man's life in every issue, with sections titled "Time and Money," "The Male Mind," "The Male Body," "Food & Wine," "Women" and "Style." The editorial focus is on living the good life and is designed to appeal to a man who is well established in his career, successful and family-oriented. The magazine is written for smart, sophisticated men, by smart, sophisticated men about what matters to men.

    For more information please e-mail: Dick.TerlaakPoot@Rodale.com.
    KC's View: