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    Published on: August 1, 2008

    Walmart in recent years has been trying to cultivate a less partisan image, inviting Al Gore to speak at a company meeting and spreading its lobbying dollars around – whereas it used to spend 98 percent of its money cultivating Republicans, now it spends 48 percent on Democrats and 52 percent on members of the GOP.

    But where it counts, Walmart still is willing to go to the mattresses to prevent Democrats from getting too much power. The Wall Street Journal has a long page-one story this morning about how Walmart is working very hard to tell all of its US store managers and department managers that if Sen. Barack Obama (D-Illinois) defeats Sen. John McCain (R-Arizona) for the presidency, it may well end up in the passage of legislation that will result in the unionization of Walmart’s stores.

    While the retailers apparently walks right up to the edge of what is legal and proper, not actually telling people how to vote, the company also reportedly leaves little doubt about where it stands on this issue.

    “The actions by Wal-Mart -- the nation's largest private employer -- reflect a growing concern among big business that a reinvigorated labor movement could reverse years of declining union membership,” the Journal writes. “That could lead to higher payroll and health costs for companies already being hurt by rising fuel and commodities costs and the tough economic climate.”

    According to the story, “Wal-Mart's worries center on a piece of legislation known as the Employee Free Choice Act, which companies say would enable unions to quickly add millions of new members.”

    The act “would simplify and speed labor's ability to unionize companies. Currently, companies can demand a secret-ballot election to determine union representation. Those elections often are preceded by months of strident employer and union campaigns.

    “Under the proposed legislation, companies could no longer have the right to insist on one secret ballot. Instead, the Free Choice, or ‘card check,’ legislation would let unions form if more than 50% of workers simply sign a card saying they want to join. It is far easier for unions to get workers to sign cards because the organizers can approach workers repeatedly, over a period of weeks or months, until the union garners enough support.”

    KC's View:
    I’ve had employers big and small tell me that EFCA is an enormous potential problem for them, and argue that it creates a playing field that gives unions an advantage that will be hard to overcome. (And some of this comes from employers who I know are exceptionally fair and generous to their staffers…and should ordinarily never have to worry about unionization.)

    I’m neither a lawyer nor a labor expert, but I do think that EFCA has some onerous implications for employers…and makes things far too easy for the unions. At least part of this opinion is informed by the fact that I think too many union leaders are more concerned about their own power and influence than about the working conditions, wages and benefits enjoyed by their members. There are times when unions serve a purpose, and times when they do not. But the culture doesn’t seem able to absorb this notion very well.

    (I say all this as someone who is married to a member of the teachers’ union.)

    What sort of fascinates me is that both sides of the EFCA issue – management and labor – seem to view this as a David-and-Goliath battle, and each side thinks that it has the role of David.

    Published on: August 1, 2008

    USA Today reports this morning that agricultural authorities from Mexico have objected to the speed with which the US Food and Drug Administration (FDA) has decided that a Mexican pepper farm is responsible for the salmonella outbreak here that has sickened more than 1,200 people in 47 states.

    In fact, Mexico is claiming that the water tank said to be responsible for the contamination had not been used in more than two months, and that the US does not have the “smoking gun” that it thinks it has.

    Enrique Sanchez, director of Mexico's Farm Food Quality Service, “said the U.S. officials ‘totally lacked scientific evidence’ to make those statements and said they had broken a confidentiality agreement by announcing findings before their investigation is complete,” the paper writes. “"We're eating this same produce in Mexico and we haven't had any problems,’ Sanchez said.”

    FDA already has made one blunder in the salmonella case – charging that tomatoes were the culprit and then finding out that they were not – but not before a recall cost the US tomato industry some $100 million.

    KC's View:
    Raise your hand if you think that the FDA may well have screwed this up yet again.

    Raise your other hand if you think that the FDA has screwed this up again.

    The FDA has almost no credibility at this point. The system is dysfunctional. You have food industry executives who normally would look at new government regulations with all the enthusiasm with which they would embrace a proctology exam now saying that the government needs to do more and do it better and do it differently.

    Our tax dollars at work.

    Published on: August 1, 2008

    Sixty-five percent of US consumers are looking at the nutritional labels on the food products more now than two years ago, according to new research from The Nielsen Company. Forty-two percent of US consumers say they check the labels before buying a product for the first time, and just 21 percent say they “always” check nutritional labels.

    In addition, according to the study, 67 percent of US consumers claim to “mostly” understand nutritional labels, and 25 percent of US consumers look at the nutritional labels when trying to lose weight. Nielsen’s research shows that more than half of US consumers (51 percent) always check the fat content on nutrition labels, while nearly half check food labeling for calories (48 percent) and trans fats (43 percent).

    In these final two metrics, US consumers appear to be ahead of global consumers; only 44 percent of global shoppers say they understand the data on the labels, and only 15 percent of them check the information when on a diet.

    KC's View:
    While I would argue that people probably don't understand nutrition labels as much as they think they do, this is certainly a positive trend…and I suspect that both the use and the usability of the labels is only going to improve. It won’t be long before major manufacturers will be able to use technology to build new functionality into their labels – allowing people to access more and better information using their cell phones, and maybe even interact with the product information in a way that helps them ask questions, get extensive product data, and make more intelligent choices. The next generation of consumers will expect and demand such interactivity and information accessibility…manufacturers would be well advised to start working on it now. Or yesterday. (Besides, I’d want to get ahead of the regulatory curve on this one…get there before the government does so I could help shape the inevitable regulatory debate about such smart labels.)

    Published on: August 1, 2008

    The Washington Post has an interesting story about an effort by some chefs and foodservice experts to educate consumers that fish frozen at sea often is fresher than fresh fish bought at the supermarket – and to explain that not only is this fish fresher, but it also can have a positive impact on the environment.

    The notion is keyed to the fact that for fresh fish to be sold in-store, it has to be sent via jet plane…which is both expensive and not good for the environment. But if frozen at sea, the fish can then be sent by train or truck, which has comparatively less impact on the environment because it contributes less to global warming.

    "What we need is more trains," says Alton Brown, of the Food Network. "There needs to be a fish train.”

    According to the Post story, “Transporting what we eat accounts for 80 percent of the U.S. food system's greenhouse gas emissions, according to scientific studies, and the average American's eating habits account for 2.8 tons of carbon dioxide emissions each year, compared with the 2.2 tons of carbon dioxide the same person generates by driving.

    “Traditionally, frozen-at-sea products have served the commodity market. Producers who operate floating factories have caught, processed and frozen such species as Pollock to make fish sticks and other inexpensive items. But with technological advances, high-end frozen products, either processed on a boat or frozen on the dock within a few hours of being caught, are making their way onto menus at white-tablecloth restaurants, where fresh fish usually occupies a place of honor.”

    KC's View:
    Not only does frozen fish have less of an environmental impact, but I once had a chef tell me that when he makes shrimp dishes at home, he tends to use Trader Joe’s frozen shrimp…because it is cheap, can stay in the freeze for long periods of time and be readily available, and tastes as good as fresh shrimp when mixed into a dish.

    Sounds like a win-win to me. And since he told me that, I’ve always kept at least a couple of bags of frozen shrimp in the freezer…because you never know when you’re going to need to make a risotto or a cioppino.

    And go figure – all these years, I’ve been behaving in a sustainably responsible way. I love it when it all comes together.

    Published on: August 1, 2008

    USA Today has a story saying that new research shows that the current economic downturn has caused 37 percent of Americans to reduce spending on their credit cards, and only 10 percent to say that they will increase spending, “as oil and food prices soar, home prices sink and lenders tighten credit.”

    The study, by California-based Javelin Strategy & Research, also says that “54% of consumers said they plan to spend less on ‘discretionary’ or luxury items, while a mere 5% plan to spend more. The percentages of consumers spending less were even higher among consumers aged 35 to 64. And 57% said they are ‘more careful’ about eating at restaurants, where bills are often paid with plastic.”

    This shift, USA Today notes, comes at a time when Americans have $961.8 billion of revolving debt … equal to roughly $3,150 per person, which is up 58 percent in this decade.

    KC's View:
    Maybe retailers will have to worry less about usurious interchange fees if people spend less using their credit cards.

    This trend also opens the door, it seems to me, for retailers to do some creative “cash-only” promotions…trying to get people to use their cards less.

    The big question, of course, is whether people will go back to their old/bad habits when the economy rebounds. But at least for the moment, there seems to be a silver lining to the dark cloud of recession.

    Published on: August 1, 2008

    • The Wall Street Journal reports that PepsiCo plans to introduce a new water drink enhanced with stevia – a controversial herb that serves as an artificial sweetener – under the SoBe Life label. However, because stevia has not yet been approved by the US Food and Drug Administration (FDA), the product will first be rolled out in Latin America, starting in Peru.

    The Journal notes that PepsiCo has beaten Coca-Cola to the punch on this one; Coke has its own stevia-sweetened soft drink in the pipeline, but is awaiting FDA approval before moving forward with it.

    KC's View:

    Published on: August 1, 2008

    • Ruddick Corp., owner of Harris Teeter, said that its Q3 earnings were up 15.6 percent to $24.5 million, from $21.2 million during the same period a year ago. Sales increased 0.8 percent to $87.2 million in the same period.

    • Ingles Markets said that its third quarter sales increased by $96.7 million to $835.3 million, with same-store sales up 13.3 percent. Q3 net income was up to $16.0 million.

    • Drug chain Rite Aid said that its July sales decreased 0.9 percent to $1.975 billion compared to $1.993 billion for the same period last year, as same-store sales increased 1.2 percent.

    • CVS Caremark said yesterday that its Q2 earnings were $771.2 million, up from $720.1 million during the same period a year ago. Revenue increased two percent to $21.14 billion from $20.7 billion.

    KC's View:

    Published on: August 1, 2008

    …will return.
    KC's View:

    Published on: August 1, 2008

    Just a couple of weeks ago, I joked here on MorningNewsBeat about the possibility that someday fat people will be charged more than thin people to ride on airplanes – a notion that doesn’t seem so far-fetched in a week when Delta announced that it will charge a whopping $50 for a second bag to be carried under the plane.

    It also doesn’t seem so outrageous when I read this week’s Supermarket Guru update from Phil Lempert, in which he notes that because of an existing law in the UK, “about twenty-five percent of parents are now being charged a 17.5 percent tax on their children's school uniforms due to increased levels of obesity – and therefore larger sizes. On average, parents with overweight children pay an additional 20 pounds (or about $40) per year. The tax only applies to those children over 13 years old. Currently, estimates show that in England one third of all children aged 11 to 15 are overweight and according to the International Obesity Taskforce, it is estimated that 220,000 more children will become obese each year. The British Government has also approved ‘fat reports’ being sent to parents twice: once at age 4-5, and again at 10-11 years old (a plan that has also been debated here in the U.S.).”

    I agree with Phil when he writes that “what I do like about these programs, especially the school uniform fat tax and fat reports is that it raises awareness and offers parents the information they need to identify the problem, which hopefully leads to helping their children eat better and exercise more. Take a look around you: my fear is that as more people become overweight we will forget that our bodies don't come naturally with that bump between our chest and waist and we will lose our perspective and our health.”

    It does seem to me, however, that sometimes – however unintentionally - we can create a environment in which intolerance can fester. And I say this as someone who believes that people who do not take care of themselves should be charged higher insurance premiums than those who do (though there ought to be a compassion index for people who have specific medical issues that prevent them from being in shape, and people ought to get points for effort).

    I also say this as someone whose parents probably would have had to pay that clothing tax when I was growing up…though I suspect that if money were involved, we would have been seeing fewer big bowls of mashed potatoes on the dinner table. And maybe that’s the point.




    The news broke yesterday that a NASA exploratory mission has detected a lake on Titan, one of Saturn’s moons, that contains liquid hydrocarbons, including liquid ethane, which is a component of crude oil.

    Just scientifically, this is extraordinary news, since it makes Titan the only body in our solar system known to have liquid on it.

    But economically…well, let’s just say that ExxonMobil almost certainly is already smacking its corporate lips at the possibility of getting building oil platforms on Titan. After all, this is what I’d really offshore drilling.

    Of course, ExxonMobil – having only generated $11.68 billion in profits during the most recent quarter, 14 percent above the same period a year ago – probably is going to want the government to pay for any spaceships that have to be sent to Titan, will want tax breaks for its efforts, and probably will charge consumers even more for their gasoline because, after all, the oil is being imported from a foreign country. A really, really foreign country.




    I have to admit that for most of its run on television, I was an enormous fan of “The X-Files.” Except for the last season, when David Duchovny’s obsessive FBI agent, Fox Mulder, hardly appeared, it was a consistently interesting and challenging TV series with strong performances by Duchovny, Gillian Anderson’s fellow agent Dana Scully, and a terrific supporting cast of freaks, conspirators, murders, monsters, and aliens. The premise of the series was that Mulder believed in the paranormal – especially the existence of aliens and a government conspiracy to hide their presence – and Scully was the skeptic charged with debunking his theories. The relationship between Scully and Mulder was sophisticated, adult and even intellectually erotic…and the series produced some of the creepiest, scariest hours ever shown on network TV.

    That said, the new movie that updates the series (that was cancelled seven years ago), “The X-Files: I Want To Believe,” isn’t everything I would have hoped for – it is more like a pretty good episode of the series rather than a feature film that expands and deepens the show’s mythology and psychology. But I liked it – in part because I enjoyed seeing Mulder and Scully onscreen again, and in part because while the movie isn’t as graphic as many of the movies made these days, it is about as graphic as I care to watch. (You can't pay me to go to any of the slasher movies that seem to get released every other week – I’d spend half the time with my eyes closed, and I’d probably have nightmares for a month.)

    So I recommend “The X-Files: I Want To Believe,” but with the caveat that it may be too mild for a lot of people. There is very little violence, and there are no explosions, and no special effects that I am aware of. And for that reason alone…I approve.




    I was changing planes this week at Dulles International, an when my flight was delayed, I noticed a hamburger stand called Five Guys. I remembered Michael Sansolo mentioning the chain to me, and I was hungry, so I decided to try a cheeseburger with fried onions, tomato and barbecue sauce. (They offer a range of toppings…that’s where the customization comes in.)

    And I gotta tell you – it was delicious. Really delicious. Juicy and flavorful and it cost me about three bucks.

    As readers of MNB know, I tend to be dismissive of fast food…but Five Guys struck me as being proof positive that a fast food burger doesn’t have to taste like one. I’m guessing that one of the advantages that Five Guys enjoys is that it doesn’t try to do a lot – it just sells burgers, hot dogs, fries and drinks. That’s it. Out of simplicity can come a kind of elegance.

    I obviously have not been paying attention, since according to its website Five Guys has stores all over the country. (Including a bunch here in Connecticut, though none near me.) I can tell you this, though. If you like a good burger and you haven’t tried Five Guys, go for it.




    Couple of wines to recommend this morning:

    • 2006 Francis Ford Coppola Director’s Cut Pinot Noir, from his new Sonoma vineyard, which is a little bit darker and richer that some pinots, and tough enough to go with a great steak.

    • 2006 L’Ecole No. 41 Semillon, which is bright and fresh and fragrant – a perfect summer wine.



    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    Sláinte!!

    KC's View: