Walmart: ‘Big Chicken’ Pecks in Synch on Prices

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Whether or not there’s been “collusion” in the White House, a Walmart law suit contends there certainly has been amongst a sizable number of chicken producers in America.

America’s largest retail grocer has filed an antitrust suit in federal court against various U.S. poultry companies alleging a conspiracy to inflate chicken prices, Dairy Herd Management has reported.

Filed in the U.S. District Court for the Western District of Arkansas, the suit alleges that more than a dozen major chicken companies “reached illegal agreements and restrained trade.”

The suit alleges that as early as 2008 through at least 2016, “Defendants’ restraint of trade was implemented primarily through two mechanisms. The first focused on coordinating their output and reducing the supply of broiler chickens into the market. The second focused on (among other things) manipulating price indices with respect to wholesale chicken prices.”

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Companies named as defendants include: Pilgrim’s Pride, Koch Foods, JCG Foods, Koch Meat Co., various Sanderson Farms units, House of Raeford Farms, MAR- JAC Poultry, Perdue Farms and Perdue Foods, Wayne Farms, various O.K. Foods units, Peco Foods, Harrison Poultry, Foster Farms, Claxton Poultry Farms, various Mountaire Farms units Amick Farms, various Case Foods units and Agri Stats Inc.

Noticeable by their absence in the suit are Tyson Foods, Inc., George’s Inc., and Simmons Foods, Inc. All three companies were named as defendants in similar price fixing cases in Illinois.

An annual SEC filing from November 2018 indicates 17.3% of Tyson’s consolidated sales in 2018 were to Walmart.

Walmart’s lawsuit alleges, “the broiler producers’ coordinated output restriction scheme was successfully facilitated by, monitored and policed using reports purchased, at significant cost, from Defendant Agri Stats, Inc. Agri Stats collects detailed, proprietary data from all Defendants and others, including housing used, breed of chicks, average size, production, and breeder flock levels.”

Several lawsuits have been filed since 2016 alleging price-fixing by poultry companies. One defendant to an earlier lawsuit, Fieldale Farms, “agreed to pay $2.25 million to settle claims by a putative class of direct purchasers alleging that it participated in this conspiracy.” As a result, claims against Fieldale Farms were released.

So far, none of these lawsuits have been resolved, making it difficult to know what impact they may have on the industry. Conspiratorial activity and price fixing can be incredibly difficult to prove, and in today’s digital age, companies can communicate without a paper trail or sufficient evidence that they agreed to adjust their supplies.

While some food retailers are duking it out in the courtroom, Costco has taken matters into its own hands, GroceryDive reports. That retailer is building its own chicken supply chain, “which will provide it complete control and the ability to provide consumers with a high level of transparency in its production practices,” the website says.

The challenge with bringing poultry production in-house, however, means Costco must now run an entire agribusiness within its retail business.

Their new supply system is projected to save Costco 35 cents per bird, which adds up to $25 million annually. Considering that U.S. consumers are scarfing down nearly twice as much chicken as beef and pork, saving excess costs on poultry is a top priority for retailers.

While hardly novel, this kind of industry collusion is, well, despicable. It’s not as if any stage of the chicken production process – and various steps are involved – isn’t turning a reasonable profit.

In Virginia – as no doubt is the case elsewhere – Perdue uses small, family-operated farms for hen-raising. Some of those farmers are Amish or Mennonite, operating in fairly remote rural areas where property prices are, pardon the pun, dirt cheap.

So, in at least a few known instances, are their power costs: Perdue farmers in some southern Virginia counties are serviced by an electric cooperative run,  with prices approved, by its members.

That entity’s overheads are, like other utility’s, proportionate to its customer base – meaning, in this instance, ‘modest’ compared to its larger supplier cousins.

Over the years, a few, scattered industry reports have noted that farmer contracts such as Perdue – a quite large corporation – are quick to squeeze their farmers and slow to share with them if profits turn up.

Walmart, in going after Perdue and its giant compatriots, is looking out for the little guy: In part due to increasing price pressure from the Aldis and Lidls of this world, Walmart is very consciously curbing price increases and cutting consumer costs as often as it can.

Its attack on ‘Big Chicken’ (don’t you love that epithet!!) is a big ‘peck’ in that direction!

 

 

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Pennies (Not Quite) From Heaven: Flyers Abandon Nearly $1m At Airport Security

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Talk about unintended consequences: The ‘take-off-your-shoes-empty-your-pockets’ routine at American airports – all in the name of security – accidentally netted the government nearly $1 million in left-behind change and bills last year. That, the TSA (Transportation Security Administration) said, was the total in coins, loose bills and way more of the latter left in wallets and purses – plus an unknown number of belts, mobile phone, and other personal items – left in the plastic bins at security check points. (As you’d imagine, many of the phones and laptops eventually made it home. The cash, USA Today reported, has been given authority by Congress to spend the money however it sees fit to improve security. In past years, the TSA’s ‘tips’ have gone toward upgrading security signs and Precheck travel-expediting systems.

TSA reported the five airports ‘contributing’ the most the year’s unintended bounty broke down which airports ‘contributed’ what amount: NYC’s JFK Airport, came in at No. 1 with more than $72,300, followed by LAX at nearly $71,800, and then Miami, Chicago’s O’Hare, and New Jersey’s Newark airport. The airport where travelers hold tight to their legal tender? Nevada’s Reno airport, which only yielded $19.85 in 2018. And chances are the Reno passengers left little more – if that much – in the change slots at the slot machines!

I don’t know if anyone’s tracking it, but chances are that as supermarkets increase self-service checkouts, customers requesting ‘cash back’ from credit or debit cards are forgetting to grab it from the machine. (I’ve done it at least twice!)

An important reason that happens is because the cash-return slot tends to be below one’s usual eye-sight range. That, and the fact that customers, at that point in the shopping experience, want it behind them.

I once was chased into a Walmart parking lot by an associate waving my $20 bill in the air.  Some others probably haven’t been so fortunate.

Details — such as where cash-return slots are placed on checkout machines — can be costly to supermarket operators, because even when you aren’t paying attention, you can bet shoppers are!

Say ‘Best If Used By,’ FDA Urges Food Folks

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An example of a confusing date label: The ‘Sell by’ date on egg cartons can, the USDA says, by up to 30 days after the eggs were packed. When properly stored, though, the eggs will still be edible — but not as tasty — for several weeks beyond the ‘sell by’ date. (Source: USDA)

The US public has been vocally concerned for years about the over-abundance of ways food packers advise when, in their opinion, a product ‘expires’. After much consideration – stretching over more than a decade – the FDA (Food and Drug Administration) has made a recommendation. In a May 23 letter to the industry, the agency encouraged all consumer-facing companies to focus on one phrase: “Best If Used By”.

Confusion over the meaning of that and the likes of ‘Use By’ and ‘sell By’ to describe quality dates resulted in “less than half” of consumers surveyed in 2007 to determine or distinguish between those phrases, the letter noted. And that, in part, the agency declared, significantly contributed to the wasting of “approximately 133 billion pounds of food worth $161 billion each year.”

It is hoped by the FDA’s Economic Research Service that if the industry standardizes on the recommended phrase, a sizable share of that waste – 30% of food moving through the system – will end up where it’s intended to be: In stomachs rather than landfills.

Signed by Frank Yiannas, FDA’s Deputy Commissioner of Food Policy and Response, the letter is said to reflect the positions of a number of industry groups, including the Grocery Manufacturers Association and the Food Marketing Institute. Those groups are expected to encourage their members to follow the FDA’s suggestion so that, “over time, the number of various date labels will be reduced as industry aligns on this ‘Best if Used By’ terminology,” Yiannis wrote. He declared that, “This change is already being adopted by many food producers.”

Food Dive noted that the agency didn’t explain why it wasn’t taking a position on “use by” product date labels, which GMA and FMI support. That term applies to “perishable products that should be consumed by the date on the package and discarded after that date,” FDA’s letter said. It may be the agency doesn’t want to support a term that prompts consumers to discard food when it’s trying to reduce waste.

Industry response to the FDA’s letter has been positive so far. Food Marketing Institute President and CEO Leslie Sarasin said in a statement the group’s members appreciate FDA’s acknowledgement of industry’s desire to reduce consumer confusion with this label.

“The agency’s endorsement signals a best practice in ways industry partners can truly deliver on a promise to provide guidance to our customers that is easier to understand,” she said.

A survey by GMA and FMI released in December found 85% of U.S. consumers thought simplified date labels would be helpful, so this latest move could push more companies to use the “Best if used by” phrase.

Geoff Freeman, president and CEO of the Grocery Manufacturers Association, said in a statement emailed to Food Dive that FDA’s support of the standardized phrase shows the CPG (consumer packaged goods) industry is working to help consumers make more informed purchasing decisions. GMA and the Food Marketing Institute came together with 25 companies in 2017 to find a way to reduce consumer confusion that led to unintended food waste, he said.

“Our solution was a streamlined approach to date labeling that has been recognized by USDA and now FDA as a smart approach and an important step in alleviating confusion and reducing food waste,” Freeman said in the statement.

While standardized use of the “best if used by” phrase on food products could begin to cut down on food waste, FDA supports additional consumer education by industry, government and non-government groups about what quality-based date labels mean and how to use them. Such ongoing efforts will likely be important to make sure “Best If Used By” continues to stand for something and that food waste declines as a result.

(Some produce packers further confuse the issue by use of “packed by” or “harvested on” dates. It can be argued that, to a great degree, those suggest consumers use common sense and their eyes to determine the freshness of an item.)

 

 

 

Sustainable Packaging: What’s New?

 

Renewables and reusables were among the new packaging product highlights at the recently concluded NRA (National Restaurant Association) annual show in Chicago.

Among the highlights, as reported by Restaurant Hospitality, were:

A unique system of reusable plastic containers from Ozzi, based in New Kingstown, R.I. This four-year-old company’s latest products are designed to eliminate the need for disposables. Ideal for foodservice programs at universities, military bases, corporate campuses or other settings, the system includes an automated collection box, where guests can return the sturdy, bright-green containers after use.

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If not returned, the guest is charged $5 per container. The containers are washed, sanitized and returned to the foodservice outlet. They can be reused up to 300 times (and at the end of their life they are shredded and recycled into yogurt cups). Ozzi officials said about 100 college campuses across the country are using the system, and some cities, like Truckee, Calif., for example, are starting to launch programs for restaurants.

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Minima, based in Taiwan, supplies compostable straws to chains like Starbucks. New this year, however, is a compostable to-go straw that comes in clear plastic-film wrapper, and that wrapper is also compostable. Minima also makes a line of compostable cutlery free of bisphenol A, or BPA, an industrial chemical in polycarbonate plastics that can leach into food, as well as various other alternative plastics for things like toothbrushes, sunglass frames and packaging tape.

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>             Canada-based Eco Guardian has a new line of Lock n’ Go compostable containers with tabs that glue closed to prevent delivery drivers from tampering with food, which has become a growing concern. Several packaging manufacturers at the show said they also were working on tamper-proofing features for their products.

Eco Guardian’s containers are made from sugarcane fiber or bamboo, with the option of both clear and non-transparent-fiber lids or base. Rather than a hinged clamshell, these containers are separate pieces, which creates less waste if used for dine in, when a hinged top might not be necessary.

That gives operators the option of putting two clear containers together, for example, for a cold item, or two fiber pieces together for something hot — or they can put a clear lid on a fiber base to mix and match. All are certified compostable, including the glue on the tamper-proofing tabs.

>             Japan-based Stalk Market has a new line of certified compostable plates and serving platters designed for dine in called Wasara, made from sugarcane, bamboo and reed pulp.

More like sculpture, these attractive pieces are designed to reflect the elegant lines of Japanese architecture. There are no lids, but they are stackable to create stunning pinwheel-like presentations.

Eco Products, of Boulder, Colo., was promoting its compostable cutlery, including a new line with no added PFAS to comply with upcoming standards. In addition, the company debuted its new “Cutlerease” dispenser that serves up knives, forks or spoons one at a time, with another popping neatly into its place. This eliminates waste and sanitation issues created around traditional cutlery holders which can appear cluttered and messy.

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>             Hay! Straws makes biodegradable straws made from straw stems, a biproduct of wheat production after the grain is harvested. The stems are rinsed, soaked, washed and air dried to create a straw that functions just like plastic, and can be used in hot and cold drinks. New from the San Francisco-based company this year is the addition of three new sizes: Jumbo, Jumbo XL and Boba Hay straws, which are designed for beverages that are thicker and chunkier, like smoothies, shakes or boba teas.

>             Making its first appearance at the show is the recently launched Butterfly Cup, a paper cup that folds into a modified sippy cup of sorts, eliminating the need for plastic lids or straws, though some models include a straw hole, if desired. The Spartansburg, S.C.-based company offers a compostable version that is currently BPI-certified, though CEO Ackshay Vashee said they are working on meeting the new standards for next year.

>             Georgia Pacific was showing off what it calls the first disposable Dixie cup made from 100% recycled post-consumer fiber. In addition, the company also demonstrated its prototype auto-sealing beverage system that puts a sealed leak-proof lid on cups to prevent delivery drivers from taking a sip while the beverage is in transit.

 

Hot News: Vietnam Pepper Farmers Suffer Hard Times

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Pepper plants in Vietnam

As a rule, shoppers have no clue where the spices they crave come from. In the case of black pepper, there’s a good chance it comes from Vietnam, the world’s largest supplier.

So?

There’s a good chance pepper prices at the grower/wholesaler level will vary a lot this year. While that, like most raw commodity price changes, is unlikely to directly affect you, it’s worth considering that, if you bother to read ingredient labels, you’ll find pepper showing up in way more things than you’d have suspected; And ingredient prices, collectively, definitely influence products’ shelf prices. Not a lot, where an individual ingredient is concerned – probably not even a noticeable amount.

But when several ingredients prices go up more or less in synch, so, sadly, will the total price of your shopping cart of goods. (We’ve all noticed that prices aren’t prone to drop, when underlying conditions change, as quickly as they rise!)

Of course that’s an extreme example of how, and/or why, retail product prices rise. But sometimes, as consumers, we need to pause before blaming the retailer for a price rise and consider, as it were, the source.

In the case of black pepper, currency exchange rates have in recent years had a dramatic impact on what farmers receive for their crops. Meaning, in turn, what users – product manufacturers/processors, for the most part – pay.

The website Vietnamnews.vn noted recently that from 2012 to 2016, when the price of black pepper peaked at VNĐ220,000 (US$9.6) per kilo – a kilo is roughly 2.2 pounds – locals rushed to grow the plant.

When the price shot up, more farmers planted pepper, often borrowing to do so. When the price fell, to as low as VNĐ55,000 ($2.35 per kilo) at the end of 2016, many farmers were seriously hurt, many fatally, and the debt load too often was overwhelming for newcomers and some old-timers as well.

Mai Liệu, of Ia Blứ Commune in Chư Pứh District, said that pepper had once made some farmers “millionaires”, but now the same farmers are in serious debt. They have had to sell their houses and land, and have even left their hometowns to work in other provinces.

“Smaller pepper farming households have fallen into even more miserable situations, including displacement from their homes,” Liệu said.

Commune chairman Phan Văn Linh said that farmers borrowed bank loans to grow pepper when prices soared, but then stopped growing the plant when prices began to drop.

The farmers were unable to pay back bank loans even after seeking “black credit”, Linh said.

According to figures from Gia Lai’s agricultural sector, the province’s black-pepper growing area expanded to 16,000ha – a hectare [ha] is close to 2.5 acres – last year, though only 6,000ha of pepper were officially planned to 2020.

Between those problems and a pepper pest that seriously affected many acres of the spice a couple of year ago, times have been tough for many of those producers of many people’s favorite spice.

 

Food Recalls: Almost a Daily Occurrence

USDA-FSIS-large-Source-USDA-FSISFood recalls are – no exaggeration – so nearly an everyday occurrence these days that, for the most part, consumers scarcely notice them.

That doesn’t make sense? Sure it does: It points to how efficiently the USDA’s Food Safety and Inspection Service (FSIS) gets the word, then gets the word out to product distributors and retailers.

A case in point: Yesterday, the FSIS issued the following press release:

WASHINGTON, May 17, 2019 – Caito Foods LLC., an Indianapolis, Ind. establishment, is recalling approximately 1,767 pounds of salad with chicken products due to misbranding and undeclared allergens, the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS) announced today. The products contain soy, a known allergen, which is not declared on the product label.

The ready-to-eat salads with chicken items were produced on May 12 through May 15, 2019. The following products are subject to recall: [View Labels (PDF only)]

  • 13.5-oz. plastic square bowl packages containing “Greek Salad with Chicken with Chicken Breast & Red Wine Olive Oil Vinaigrette Dressing” and Sell By dates ranging from 05/18/19 through 05/21/19 represented on the label.
  • 11.25-oz. plastic square bowl packages containing “Tuscan Style Caesar Salad with Grilled Chicken With Grilled White Chicken Tossed In Pesto” and Sell By dates ranging from 05/18/19 through 05/21/19 represented on the label.

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The products subject to recall bear establishment number “P-39985” inside the USDA mark of inspection. These items were shipped to Kroger retail locations in Illinois, Indiana, Kentucky, Michigan, and Ohio.

The problem was discovered by the recalling firm during label verification activities.

There have been no confirmed reports of adverse reactions due to consumption of these products. Anyone concerned about an injury or illness should contact a healthcare provider.

FSIS is concerned that some product may be in consumers’ refrigerators. Consumers who have purchased these products are urged not to consume them. These products should be thrown away or returned to the place of purchase.

FSIS routinely conducts recall effectiveness checks to verify that recalling firms are notifying their customers of the recall and that actions are being taken to make certain that the product is no longer available to consumers. When available, the retail distribution list(s) will be posted on the FSIS website at www.fsis.usda.gov/recalls.

Consumers with questions about the recall can contact Caito Foods LLC.’s Consumer Feedback Line at (844) 467-7278. Members of the media with questions about the recall can contact Meredith Gremel, Organizational Communications, Spartan Nash, at (616) 878-2830.

Spartan Nash is described by Wikipedia as “SpartanNash is an American food distributor and grocery store retailer headquartered in Byron Center, Michigan. In terms of revenue, it is the largest food distributor serving military commissaries and exchanges in the United States.”

As the press release notes, the recall affects product distributed to stores of one retailer, Kroger – the nation’s largest supermarket company – to stores in in Illinois, Indiana, Kentucky, Michigan, and Ohio.

Rest assured, Kroger got the word before that press release went out – and it promptly ensured that none of the potentially affected product made it to display cases.

That’s why consumers, and consumer-serving media outlets, seldom actually need to raise red flags about a potential allergen or whatever in this or that batch of Product X: The word’s already out where it needs to be, across the distribution chain, and the problem’s been dealt with.

The cause of the problem is another issue: How did it happen, what the company had to do to ensure the issue won’t crop up again – those points were, you can be sure, are being addressed as we speak.

Among the greatest risks and dangers posed by the Trump administration is it’s indiscriminate elimination of rules and regulations that, over the years, have been put in place for good, well-thought-out reasons. It’s   not just Americans, but citizens in all countries American food producers export to that need fear the random reduction of rules and regulations for food handling, packing, distribution and selling.

The food industry polices itself pretty efficiently, but the ‘policeman around the corner’ in the form of those rules and regulations enables retailers, and consumers, to breath easily, knowing they are protected.

Bartender Drinks, Drives, Dies; Blames Tiger Woods

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Tiger Woods flips his ball as he walks along the ninth green during a practice round for the PGA Championship golf tournament, Monday, May 13, 2019, in Farmingdale, NY.   (AP Photo/Julie Jacobson)

The family of a bartender in a restaurant owned by Tiger Woods is suing the golfer, somehow blaming him because, after serving himself too many, the employee died in a single-car accident.

Next, a convenience store customer will sue the lad at the checkout who, after properly carding her, bagged and handed over a paid-for six-pack.

The reason for this suit: The clerk supposedly should have known the customer would down the entire six pack in the parking lot then drive over an embankment, causing the car to crash, catch fire, and severely burn the customer.

The latter makes as much sense as the former, right?

Sadly, Woods and his girlfriend, Erica Herman, who is listed as general manager of his Florida restaurant, are being sued – for wrongful death.

These days, you have to think there’s a totally unreasonable possibility that the court will see for the plaintiff – the now-deceased drunk bartender. Regardless of the plaintiff’s stupidity leading to the cause for the suit.

The civil complaint in the Tiger Wood case says restaurant employees – and, by default, the owner – should have kept the off-duty bartender from drinking, or at least drinking ‘too many’, because they knew he had been attending AA (Alcoholics Anonymous) meetings. The fact that he did drink too many was attested to by his blood alcohol level of .256 – three times the legal limit.

CNN reported that the wrongful death suit is asking for an unspecified amount of damages.

This is a ridiculous lawsuit. But it exemplifies how victim-friendly juries in the US have become. And the trend is a bad one.

A side story: Thirty or so years ago, I worked in a bar/restaurant owned by a couple of guys whose understanding of the hospitality business came from their prior ownership of a nightclub. It burned down. They opened, just down the road, the place I worked in.

From all appearances, their focus was on seeing that their friends – and they seemed to have a lot of them – had fun… and that the booze kept flowing.

And flow it did: While the restaurant did a so-so business – three-quarters filled once then about half that volume on the ‘second turn’ on most nights except Saturday (which did better), the bar was a genuine cash cow.

The bartenders – there usually were two – were busy, not just serving customers but schmoozingly encouraging customers to buy more. And keeping the table servers happy: Several of us servers had a ‘thing’ going where we’d order, say, three drinks for a table and one for ourselves. It was pretty obvious to the staff that the tabs weren’t checked too closely by management, because the servers were seriously cutting into profits.

Some but not all servers drank from the time they put their first order in through closing time. Then the fun began.

The manager/owners invited ‘friendly’ servers to join them and their friends at the bar, where all carried on drinking, on the house, for a couple of hours or more. My drink of choice was Jack Daniels with a Heineken. On a typical night, after already having sipped through several Heinies while serving, I’d knock off two, three or more of those combos. Then drive home.

In that restaurant’s first three months, at least three staff members crashed their cars on the way home. I was among them.

At that time, my then wife and I rented an apartment in a pricey Connecticut town called home by many well-heeled Wall Street types. The local cops were, shall we say, ‘generous’ in their treatment of gentle drunk drivers. (I looked young, perhaps young enough to be mistaken for one of the well-off’s offspring.) Not only wasn’t I charged – after running down a row of guardrails and impaling my car thereon – I got a front-seat ‘free ride in a cop car’ home. (Cop car front seats then weren’t occupied by a computer and other high-tech gear, as they are today.)

There is no way that would happen anywhere today!

Woods reportedly was drinking with the bartender, Nicholas Immesberger, 24, a couple of night before the night in question, when he left Woods’ establishment three hours after his shift ended. Shortly thereafter, he crashed his Corvette and died.

His family’s suit alleges that the employees and management at Woods’ place promoted drinking by employees. As did those where I worked.

A fellow worker of mine not only crashed her car, she was hospitalized for several weeks. There was no talk – to my knowledge – of suing the restaurant for ‘encouraging’ staffers to drink on the job.

But they did.

US supermarkets are increasingly offering wine bars and other drinking ‘opportunities’ – beyond wine tasting, which, realistically, it would be hard for (most) customers to abuse.

That’s a fact that food sellers and their shoppers need to keep in mind: The former for insurance reasons, the latter because, despite the retailer’s best efforts, some people will over-imbibe. Then drive home.

And shoppers, truth be told, owe it to merchants to behave responsibly where drink and food samples – surely a subject for another posts! – are concerned.

 

 

Developments concerning food — from research to farm to factory to restaurants and home.