LEGISLATIVE VIEWPOINTS

WASHINGTON -- Major food industry associations are hoping the Congressional winds will blow as favorably on issues like bioterrorism, health care reform and pension fund investments as they did last week when the Occupational Safety and Health Administration here decided to pursue ergonomics guidelines rather than strict standards. As national trade associations take to Capitol Hill to lobby on behalf

WASHINGTON -- Major food industry associations are hoping the Congressional winds will blow as favorably on issues like bioterrorism, health care reform and pension fund investments as they did last week when the Occupational Safety and Health Administration here decided to pursue ergonomics guidelines rather than strict standards. As national trade associations take to Capitol Hill to lobby on behalf of the food industry, these issues and others, which could potentially restrict or hamper business, will dominate their agenda.

SN spoke with the heads of the major national organizations and discussed legislative issues of the day as well, as recurring concerns like ergonomics and estate tax repeal.

Protecting the Nation's Food Supply

Every industry executive that SN contacted said their respective associations will be active in cementing strong yet sensible legislation aimed to combat bioterrorism and possible threats to America's food supply.

Most executives oppose the Health and Human Services Department's proposal that any business in America that sells, distributes or handles food in any way must register with the Food and Drug Administration. All agreed this would create more headaches than it could cure.

David French, vice president of government affairs at Food Distributors International, Falls Church, Va., said, "This is a disaster waiting to happen. If the Immigration and Naturalization authorities can bungle the distribution of visas, then the FDA certainly does not have the infrastructure to handle all of the information this registration process would create.

"Innocent businesses that handle food could easily be misregistered and be suspected of illegal practices."

Tom Wenning, senior vice president and general counsel at National Grocers Association, Arlington, Va., said NGA is opposed to the mandatory registration idea. "We are in full support of making laws stronger that provide greater food safety, but we do not need regulations like this that will do nothing to actually further safety."

Wenning added that NGA does not see how registering with the government will further food safety in any specific way.

Susan Stout, vice president of federal affairs at the Grocery Manufacturers of America, Washington, said that GMA supports legislation that protects against bioterrorism, but hopes Congress does not go too far in empowering the FDA. "We have to make sure laws aren't passed that give such broad-based authority to regulatory agencies that the original objective of simply protecting the food supply is lost," she said.

The GMA is also opposed to creating an office of food-safety commissioner, or creating a single regulatory agency to oversee food safety, since this would also give too much broad authority over the food industry, Stout said.

A piece of legislation hotly opposed by the industry is a proposal that mandates country-of-origin labeling on all food products sold in the U.S. Industry executives said this is not a food-safety or trade issue, and should not be passed into law.

"From an industry perspective, noting what country a product comes from is more of a marketing issue, and has nothing to do with actual food safety. We are very much opposed to this bill," Stout said.

The NGA is also opposed to country-of-origin mandates, and Wenning said the association will be working to make sure this item does not progress any further in Congress.

John Motley, vice president of government affairs at the Food Marketing Institute, Washington, told SN, "Hopefully, we will get a beneficial resolution, since the president, the House and the industry is opposed to the labeling. It could be dropped altogether, or a voluntary labeling plan may be adopted."

Restricting Pension Fund Investments

After the fallout from the Enron scandal, where thousands of employees' pensions were depleted through Enron's questionable practices, the government may look to change how companies are allowed to invest pension money. The association representatives said that the government should not put overly strict limits on what companies can do with pension funds.

According to Wenning, if the limits are too strict on company use of funds, then smaller independent retailers may not have needed capital to grow and reinvest into the business. "Private companies and employee stock ownership companies need flexibility in a pension fund. We will hopefully hammer out a workable and reasonable solution," Wenning said.

French also said that less is more regarding limiting company access to pension funds. "There are two bills dealing with pension reform, one in the House and one in the Senate, and the House's bill is far more preferable," French said. "It's important not to let Congress change so much that they do more harm than good."

Motley said that FMI thinks the immediate response to the Enron scandal was to go to extremes in rewriting pension laws. But he added that FMI is working to ensure that any legislation passed does not injure the successful retirement plans set up by privately held companies and employee stock ownership plans. "Congress is concerned, but will most likely put together a bill that simply gives employees the ability to diversify their portfolios more quickly than before," Motley said.

Monitoring An Election Year

This being an election year, the associations will be keeping a close eye on several swing states that could tip the balance of power in the Senate and make for less business-friendly politics.

"We'd like to see a pro-business Senate, and we'll be asking our members to support the Republican senatorial candidates in Minnesota, Missouri and South Dakota especially," French said.

The incumbent candidates who are involved with key committees that deal with business issues will be watched closely, Stout said. "We always look to support candidates that are sensitive to the needs of our industry, and are willing to listen."

Keeping Health Costs Down

As health insurance costs rise, Motley said FMI will be watching several health care-related issues closely. Namely, the patients' bill of rights is one issue that will always be hotly opposed by the industry, Motley said.

"This type of legislation would increase the already-skyrocketing costs of health care by up to 4%, if employees were able to sue employers over health care issues, as the bill of rights proposes," Motley said.

The bill of rights would be even more damaging to retail businesses that are heavily unionized, Motley said, as these businesses have the highest insurance costs since union members usually pay nothing for benefits.

FMI is also looking to ensure that retailers continue to receive a subsidy for providing pharmacy benefits to senior citizens. "Food retailers fill 17% of the prescriptions in the country, but there are a number of proposals that, if passed, would set up a restrictive network for prescription drug distribution," Motley said.

Seniors would be forced to receive their prescription drugs through mail-order programs if this network were put into place, a system that Motley said would not offer the service and assistance that an in-store pharmacist can provide.

Following Ergonomics Guidelines

As reported in SN last week (April 15, Page 12), OSHA's decision to pursue ergonomics guidelines instead of standards has lessened the possibility of restrictive pressure on the food industry.

"Otherwise," Wenning said, "we could have had a major fight on our hands again."

Voluntary guidelines mean that businesses can go about reducing workplace injuries without the government getting too involved, said Tim Hammonds, president and chief executive officer of FMI. Hammonds also noted that the money the industry spent on fighting the potentially damaging ergonomics regulations last year could have been better spent on reducing workplace injuries, had OSHA decided from the start to pursue guidelines instead of regulations.

Motley said FMI expects a close fight if the ergonomics issue manages to make its way to Congress again. "Allies of organized labor will probably try to force the administration into regulations, where we would prefer a more cooperative approach between the industry and legislators," Motley said.

Advocating Permanent Estate Tax Repeal

Though President Bush essentially put the pieces in place for the repeal of the estate tax when he cut taxes significantly last year, more needs to be done to make the change permanent, association executives said. The executives who spoke to SN said that they are confident they have enough support in Congress to finish the estate tax off for good.

"It has become a perennial issue, but I think we have finally gotten to the end of the line on the estate tax issue," French said.

Wenning told SN, "NGA remains committed to making last year's tax cuts permanent, especially the estate tax."

He also noted that NGA has been actively lobbying the Senate to follow through with the president's plan to ease America's tax burden.

FMI will be doing its best to make the repeal permanent, but Motley said he does not feel that a vote will come up this year. "But the president is committed to making this happen, so it is a long-term goal that we will see come to fruition soon."

Key Issues At A Glance

Below are this year's top legislative issues that can potentially impact the food industry, and the industry associations' position on them.

Issue

Estate Tax Repeal

Industry Position

Support

Issue

Ergonomics Legislation

Industry Position

Opposed

Issue

Pension Reform

Industry Position

Support, but changes should be minimal

Issue

Country of Origin Labeling

Industry Position

Opposed

Issue

Bioterrorism Legislation

Industry Position

Support, but the FDA should not be given too much authority over the industry

Issue

Increasing FDA Budget

Industry Position

Support

Issue

Election Year Support

Industry Position

Industry backing pro-business, primarily Republican candidates and incumbents with a track record of being sympathetic to the food industry