LANDOVER, Md. -- Legislation cropping up in states around the country that would force businesses to either provide health care for their employees or subsidize government health care programs is sometimes dividing food retailers onto opposite sides of the issue.
In Maryland, Giant Food here has been aggressively campaigning in support of a bill that would penalize large companies that pay less than 8% of their wage costs in health care benefits, but the Ahold-owned chain is quite alone in its position. Last month the legislative committee of the Maryland Retailers Association, Annapolis, voted to support Gov. Robert L. Ehrlich Jr. in his veto of the bill.
"We want the governor's veto to be overridden, and we are lobbying to try to get that to happen," said Barry Scher, vice president, public affairs, Giant Food.
The state legislature, which narrowly passed the bill before Ehrlich vetoed it, can seek to overturn his veto when the legislature reconvenes in January. The MRA had been neutral on the bill through the legislative process "in large part out of deference to Giant," said Tom Saquella, president, Maryland Retailers Association.
Giant Food and Wal-Mart Stores, Bentonville, Ark., are the only businesses in the state affected by the Fair Share Health Care Act, which covers employers with 10,000 or more employees.
"Most of our members are independent business," Saquella told SN, who added that Wal-Mart does not belong to the MRA.
The legislation is similar to other bills that have been introduced during the past year in several state and local governments, including Washington, New Jersey, Connecticut, New York City and San Francisco.
"Once the state legislatures come back from recess in January, I think you will see bills like this in about 30 other states," Saquella said.
Scher of Giant Food said he supports the legislation because Giant already pays more than 20% of its payroll expenses for health care coverage for its employees, and costs have risen significantly in the past few years. "We think that any major employer that comes into the state should pay their fair share," he said.
Scher and Saquella both said that independent retailers in the state may be afraid that even though the legislation was not targeted at them, it could eventually be modified to include smaller retailers. Scher said he has been trying to convince them otherwise.
"I've told people to stop worrying about what could happen in the future," he said.
In New York City, the City Council recently overrode the veto of Mayor Michael Bloomberg to pass the Health Care Security Act, which would require grocery retailers to provide health insurance for their workers. The bill was supported by several of the city's chain groceries but opposed by corner-store grocery retailers.
"For some reason the smaller operators -- the bodegas and stuff -- were appalled that I led this thing," said John Catsimatidis, chairman, president and chief executive officer, Red Apple Group, parent of the Gristedes supermarket chain. "I said, 'If you are the guys that are illegally paying employees off the books and you are illegally hiding your employees from the unions, then I guess you should be concerned."'
Since its introduction in New York City, similar bills have been introduced in two neighboring New York counties.
The Food Industry Alliance of New York, which remained neutral on the bill in New York City, has been working with lawmakers on the wording of the bills to make sure they don't create hardships for smaller operators and are inclusive of all retailers selling food.
"We want realistic benefits for employees," said Stan Sorkin, chairman of the FIA and director of advertising for Krasdale Foods, White Plains, N.Y.
Jeff Berger, CEO, Food City, Englewood Cliffs, N.J., which operates several supermarkets in New York, said he supports such legislation. "I think it's a good issue," he told SN. "We're a union shop, and we provide health care for all those employees who are non-union, so it doesn't affect us as much. It mostly affects those that are non-union."
Legislation in New Jersey "is still in the discussion phase" said Linda Doherty, president, New Jersey Food Council, Trenton.
"We would be very much opposed to this," she said, noting that the bill is very different from the one introduced in New York and would impact many of the association's members.
"The Food Council is at the table, and we hope to be part of any type of action," she said.
It is unlikely that the bill will pass this year during the "lame duck" session that follows this week's elections, she added.
