retail news in context, analysis with attitude

...with brief, occasional, italicized and sometimes gratuitous commentary...

Bloomberg reports that McDonald's and Yum! Brands, which has both KRC and Pizza Hut restaurants, have stopped buying meat products for their Chinese operations from a Shanghai-based supplier because of charges that the company has been selling chicken and beef past their expiration dates.

The story notes that "the allegations renew concerns about unsafe food in China following abuses that have included lacing baby formula with melamine, a compound used in plastics, and fox DNA found in donkey meat."

It always seems like it is Chinese suppliers who make the most persuasive possible case for Country of Origin Labeling (COOL).


CNBC reports that US Treasury Secretary Jack Lew has "railed against U.S.-based companies that attempt to avoid domestic taxes by re-incorporating overseas through acquisitions, calling out their lack of 'economic patriotism.' Pharmaceuticals company Mylan and drug chain Walgreen sparked the debate on what's known as corporate inversions when both announced their intention to buy foreign companies for the tax benefits.

According to the story, "Currently, the U.S. has the highest corporate tax rate of all the OECD countries at 35 percent, a fact that corporations argue forces them to find tax savings abroad. The Congressional Research Service found that the number of corporate inversions has accelerated, with 47 such deals made in just the last decade. It also discovered that the U.S. Treasury would lose an additional $20 billion in tax revenues over the next decade because of these deals."


• The Sacramento Bee reports that R.J. Reynolds Tobacco Co. has vowed to an appeal a jury verdict of $23.6 billion in punitive damages that came after a lawsuit was filed by the widow of a longtime smoker who died of lung cancer.

A company executive called the damages "grossly excessive and impermissible under state and constitutional law … This verdict goes far beyond the realm of reasonableness and fairness, and is completely inconsistent with the evidence presented. We plan to file post-trial motions with the trial court promptly, and are confident that the court will follow the law and not allow this runaway verdict to stand."

According to the story, "The case is one of thousands filed in Florida after the state Supreme Court in 2006 threw out a $145 billion class action verdict. That ruling also said smokers and their families need only prove addiction and that smoking caused their illnesses or deaths.

"Last year, Florida's highest court re-approved that decision, which made it easier for sick smokers or their survivors to pursue lawsuits against tobacco companies without having to prove to the court again that Big Tobacco knowingly sold dangerous products and hid the hazards of cigarette smoking.

"The damages awarded to Robinson after a four-week trial came in addition to $16.8 million in compensatory damages awarded Thursday."

Even I, who believe that a special circle of hell is being reserved for tobacco company executives, think that $23.6 billion seems a little overboard.

But then, I read the tobacco company executive's quotes, and I wonder, what exactly is within the realm of reasonableness and fairness when it comes to someone dying of a product that you made, that you designed to be addictive, and then supported with millions of dollars in ad dollars? I'm not saying that people who smoke don't have culpability; whenever I see anyone smoking, especially a young person, I wonder what it is they don't understand about the messages on the side of those packs?

Maybe the award is a little much. But it'll be kind of fun to watch them sweat…

KC's View: