SENATE SHIFT THREATENS INDUSTRY LEGISLATION

WASHINGTON -- Food industry association executives expressed concern about the future of their legislative agendas in the wake of the Senate's shift to a Democratic majority following Sen. James Jeffords' (Ind-Vt.) defection from the Republican Party.Issues industry leaders mentioned included President Bush's tax cut plans, the minimum wage, health care reform and energy policy.Commented Tim Hammonds,

WASHINGTON -- Food industry association executives expressed concern about the future of their legislative agendas in the wake of the Senate's shift to a Democratic majority following Sen. James Jeffords' (Ind-Vt.) defection from the Republican Party.

Issues industry leaders mentioned included President Bush's tax cut plans, the minimum wage, health care reform and energy policy.

Commented Tim Hammonds, president and chief executive officer of the Food Marketing Institute here, "The change puts in peril the president's tax program. Under the current plan, the stipulations will only stand for 10 years. We will have to work very hard at keeping it on course and hopefully making changes like estate tax repeal permanent." Tom Zaucha, president and chief executive officer of the National Grocers Association, Reston, Va., noted, "With Sen. Ted Kennedy [D-Mass.] now heading up education and labor [committees], a minimum wage increase could come front and center, which we did not expect. Also, health care reform will also be a big issue, and the ergonomics problem may also resurface."

Hammonds expressed similar concerns. "The ergonomics regulations would have never been repealed with the Senate the way it is now, so we are thankful we got that taken care of," he said. "But the possibility of health care reform will most likely come up now, and we at FMI will be working hard to protect the limitation for employees to reach through the system and sue employers."

Zaucha also noted that the shift will most likely result in an energy policy that favors conservation, which, he said, will not cut currently high fuel prices.

John Block, president and CEO, Food Distributors International, Falls Church, Va., also said energy will be a tough fight for associations in the coming months.

"We are ready to face energy challenges now that the tax bill is safely set in motion," he observed. "Our members have a lot of trucks on the road and use a substantial amount of energy for refrigeration, and these costs really affect the bottom line. Creating a sensible energy policy will be the next big push for the industry."

At the same time, association leaders said they were cautiously optimistic about many of their legislative goals, largely because their views have bipartisan support.

However, the executives also said they realize they are now playing defense.

Hammonds told SN, "Once again we are in a more defensive posture in the Senate. We don't have the ability to push a positive industry agenda.

"However, the FMI strategy has always been to work both sides of the aisle, as we did on the tax bill. We are well-positioned to be effective in this kind of arena."

Zaucha said although the industry is now on the defensive, the change in majority party will not have a great effect.

"So much of what we do has been predicated in bipartisan support," he noted. "But whoever makes the first move in Congress is in a better position to control the agenda." Manly Molpus, president and CEO, Grocery Manufacturers of America, said he also feels that the shift will not have a great effect on the industry's agenda.

"The change in power is a very significant transformation, but luckily, a large number of our issues do not have a partisan edge," Molpus said. "They can control the agenda, but not the votes. Our job is to work with whoever is in power. The association's objective is to establish the right relationships in order to be an effective advocate."

Molpus added that the industry can lobby the still Republican-majority House to introduce legislation and push for changes through conference committees.