retail news in context, analysis with attitude

Published on: December 17, 2008

Published reports say that President-elect Barack Obama has proposed freezing the estate tax – popularly known as the “death tax” – at 2009 levels, a move that would neither eliminate it completely nor return it to 2001 levels, at which point it began what was to be a decade-long phase out on the way to complete eradication.

In 2001, the maximum estate tax was 55 percent on estates valued above $675,000. The 2009 rate, which would be locked in by the Obama administration, would be 45 percent on per-spouse inheritances of $3.5 million or more.

According to various stories, the proposal is likely to find critics at both ends of the political spectrum – conservatives who want to see the death tax eliminated completely, and progressives who believe in what they call “fair tax policies” for lower class and middle class families.

Published on: December 17, 2008

Faced with an enormous $15 billion budget deficit in the middle of a recessionary economy, New York State Gov. David Patterson yesterday a broad series of tax increases, some of which could affect food retailers and manufacturers.

Among them, a 15 percent tax of sugared soft drinks and other beverages, which was couched as an “obesity tax” that would simultaneously put money in the public coffers while discouraging the consumption of products that are accused of making people – especially children – dangerously overweight. Diet drinks would not be affected.

The American Beverage Association (ABA) has blasted the proposal as a “money grab.” Kevin Keane, the ABA’s senior vice president of public affairs, said yesterday, “We think that everybody has to keep in mind that we're in a recession, and in an economy like this, the last thing we should be doing is raising taxes on everyday needs like clothing and groceries. That doesn't wash with the consumer. This has the potential to affect the consumer's checkbook, as well as paychecks. Every time you raise taxes on an industry's product, you put jobs at risk. It's a double whammy.”

One other result of New York State’s fiscal problem … According to the Albany Times Union, is that New York could become the 36th state in the nation to allow the sale of wine in supermarkets – a move that Gov. Patterson estimates could generate between $100 million and $200 million in licensing fees from supermarkets.

Published on: December 17, 2008

MSNBC reports that death rates in the United States from heart disease and stroke have fallen by 30 percent during the past decade, but experts worry that the nation’s continuing obesity crisis could erase any progress that has been made.

According to the story, “Better control of cholesterol and blood pressure, declining smoking rates and better medical treatments all contributed to the dropping death rates from heart disease, which remains the No. 1 cause of death in the United States, the American Heart Association said in a report. Preliminary government figures from 2006 indicate that the rate of heart disease deaths — including heart attack, heart failure and other conditions — fell about 31 percent from levels recorded in 1999, according to the report. In addition, death rates from stroke, the third leading cause of death, fell by 29 percent.”

The story also notes that “the cascade of health effects from worrisome rates of obesity could reverse the progress, according to the report. Government figures show that 26 percent of Americans are obese, and state rates reach as high as 33 percent. Obesity raises a person's risk of heart disease, stroke, some types of cancer, the most common form of diabetes, high blood pressure, high cholesterol and other problems.”

Published on: December 17, 2008

The Wall Street Journal reports that Andrew von Eschenbach, commissioner of the US Food and Drug Administration (FDA), plans to resign, effective January 20, 2009 – the first day of the Obama administration.

According to the Journal, it is expected that von Eschenbach’s departure will only ramp up the lobbying already taking place over who the next FDA head will be, as a variety of interest groups look for someone who is perceived as taking more seriously the FDA’s mission to protect consumers rather than business.

The Los Angeles Times notes this morning that one of the proposals that will face President-elect Obama and his new FDA commissioner – a proposal that the FDA be split in two, with one agency focusing on food safety and another focusing on drugs.

Published on: December 17, 2008

The Denver Post reports this morning that the Colorado Department of Agriculture has ruled that the pricing policy used at Nash Finch’s Avanza grocery stores there is not illegal but could be considered misleading – and ordered new, clearer signs.

Avanza uses a “shelf plus 10 percent” price policy, essentially saying that the shelf price is “cost” and that the 10 percent being added at checkout is gross profit.

To this point, the signs have said "A Great Way To Save — Plus 10% at the Register!" The new signs will say, "A charge of 10% will be added at the cash register."

Nash Finch has defended the pricing policy as not being misleading, and has said that it is “well accepted” by its customers. However, apparently not all customer shave felt that way, since it was consumer complaints that led to both regulatory agency and press investigations into the policy.

Published on: December 17, 2008

The New York Times reports this morning that President-elect Barack Obama plans to name former Iowa Gov. Tom Vilsack as his administration’s new Secretary of Agriculture. The announcement is scheduled to be made today.

The Times writes that Vilsack “is a strong proponent of renewable energy and developing the nation’s alternative fuel industry. He will be joined at a news conference here by Senator Ken Salazar, Democrat of Colorado, who will be nominated as interior secretary … Both Mr. Obama and Mr. Vilsack are regarded as staunch advocates of ethanol and other bio-fuels as a way to reduce the nation’s reliance on foreign oil. And Mr. Obama and Democrats in Congress are working on a major economic stimulus package, in which they intend to promote the creation of thousands of new jobs tied to “green energy” industries, including the production of solar and wind energy.”

Published on: December 17, 2008

A new study from The Nielsen Company says that “in today’s struggling economy, more than half (58 percent) of U.S. consumers are ‘very concerned’ about rising food prices,” and that “nearly half (47 percent) of consumers surveyed prefer CPG manufacturers offer large, economy sizes with lower price points per serving.”

Faced with rising food prices, Nielsen says, consumers are making their packaging preferences clear:

• Only 17 percent of consumers prefer CPG manufacturers introduce new, smaller pack sizes at lower prices.

• Nine percent of consumers suggest CPG manufacturers downsize or modestly reduce the packaging size of products, keeping the price of the product the same.

• Other options include raising the prices of existing items proportionally (8 percent); offer fewer sales (8 percent); offer the same number of sales, but at less of a savings (7 percent); and produce slightly lower quality products, but keep the price the same (4 percent).

Published on: December 17, 2008

• In Ireland, the Herald reports that supermarket chains have begun putting Irish pork products back on their shelves, as concerns subside about dioxin contamination of feed that was given to Irish pigs on specific farms. Plans shortly will be announced for the destruction of the affected herds.

• USA Today reports this morning that “a European Union high court on Tuesday scrapped a trademark for Anheuser-Busch's famous ‘Bud’ beer name in Europe, handing a legal victory to Czech rival Budvar. Anheuser-Busch's trademark had covered the use of the word ‘Bud’ on signs, beer labels and promotional goods in the 27 nations of the EU. But the exclusive use of the famous name have seen a number of legal challenges by Budvar, which itself lays claim to the use of the brand.” In remains possible that Anheuser-Busch InBev could appeal the ruling.

Published on: December 17, 2008

We submit for your approval the following scene.

A young man, dressed to kill, considers his options as he decides which cologne to wear for an evening of romance.

Black Code from Armani? Dreamer from Versace? Crave from Calvin Klein?

Or Flame, from Burger King?

That’s right.

The Boston Herald reports that Burger King has rolled out a new body spray called “Flame,” which it describes as “the scent of seduction with a hint of flame-broiled meat.”

It is being sold for $4 per bottle on Burger King’s website, as well as at select retailers, according to the paper.

Published on: December 17, 2008

…will return.