WASHINGTON (FNS) -- The grocery industry is focused on politics, and the outcomes are likely to have long-term reverberations for wholesalers and retailers.
The politics involve the sweeping changes being spearheaded by the 104th Congress, which has been considering issues of prime importance to grocers at a frenetic pace. From Rep. Newt Gingrich and the Contract With America to President Clinton's regulatory programs, there are a plethora of issues and personalities the industry is tracking. Now the spotlight shifts from the House to the Senate.
Industry associations have been pulling out all the stops to monitor and influence the outcomes. For instance, Kevin Burke, vice president of government relations at the National-American Wholesale Grocers' Association, Falls Church, Va., said that in his 16 years in Washington, he has never worked as hard as he did during the first three months of this year. Tom Wenning, senior vice president and general counsel of the National Grocers Association, Reston, Va., predicted the next 100 days in the Senate will be as important as the first 100 days of the House's business this year. With the first 100 days now history, the pace may slow somewhat in the Senate, but the grocery industry continues to track all movement. Now that Congress has returned from its three-week April recess, the Senate turns to its work to complete several items left over from the much-celebrated House Republican Contract With America that are important to the grocery industry. Those include: · Product liability reform, which would limit punitive damages and protect retailers.
· Reform of the $25 billion food stamp program.
· A three-part regulatory reform effort that promises to reduce government mandates on business.
In addition, new items not included in the Contract are pending and include reform of the Superfund environmental law, the Occupational Safety and Health Administration and the Food and Drug Administration.
The Senate's product liability reform is not as broad as the House-passed version. Sponsored by Sen. Jay Rockefeller, D-W.Va., the plan is similar to the House's in that it would cap punitive damages at $250,000 or three times the economic damages and would protect manufacturers and retailers from liability claims resulting from misuse or alteration of their products. The Senate would offer retailers less protection, however, because retailers would be liable if a manufacturer were unable to pay a judgment or could not be brought into court.
Both the House and Senate bills would limit complaints if the victim was under the influence of alcohol or drugs. While the House plan would provide a 15-year statute of limitations, the Senate plan sets a two-year term.
Product liability reform has never had much success in the Senate, where last year supporters of reform fell three votes short of ending a filibuster. Senate Commerce Committee Chairman Larry Pressler, R-S.D., predicts that even with 54 Senate Republicans, he still is one vote short of stopping a filibuster. Floor debate is not expected until the end of summer.
The $25 billion yearly food stamp program also is facing reform. House Agriculture Committee Chairman Pat Roberts, R-Kan., declined to agree to demands by Republican governors that the program be turned over to states as block grants and instead listened to most in the grocery industry who wanted the program kept at the federal level or turned over to the states as coupons.
The House plan, designed to save $21.4 billion over five years, would cap food stamp allotments and end automatic cost-of-living increases. In an effort to reduce fraud, it encourages states to set up statewide electronic benefit transfer systems. Once these systems are in place, a state could operate its food stamp program under a block grant.
In the Senate, however, the block grant idea has some significant support from Sens. Bob Packwood, R-Ore., chairman of the Finance Committee; and Richard Lugar, R-Ind., chairman of the Agriculture Committee. Alarmed at the apparent support on the other side of the Capitol, Rep. Bill Emerson, R-Mo., chairman of the House Agriculture Department Operations, Nutrition and Foreign Agriculture Subcommittee, wrote Packwood, Lugar and Senate Majority Leader Robert Dole, R-Kan., to urge them to reconsider. George Green, vice president and assistant general counsel at the Food Marketing Institute, Washington, said the industry favored the House approach. FMI has been in the forefront of assisting states in moving to the electronic benefits transfer system, and so favors that provision of the bill.
John Aguirre, vice president of government relations at the United Fresh Fruit and Vegetable Association, Alexandria, Va., said the House Republicans lost some ground on the public relations front when Democrats criticized them for the food stamp reform and for block granting the school lunch program. "I wonder if the Senate will be sensitive to the public relations battles ahead," Aguirre said. "The Senate must deal with public relations vs. substance."
Regulatory reform was one of the biggest Contract items, and parts of it are still pending in the Senate. One measure expected to be considered soon after the Senate returns is a plan sponsored by Sens. Orrin Hatch, R-Utah, chairman of the Judiciary Committee, and Charles Grassley, R-Iowa. The plan would require federal agencies to conduct cost-benefit analyses of major proposed regulations estimated to cost at least $50 million to determine if the costs of the rule outweigh its benefits. Also, any person affected by a proposed rule could petition the agency to conduct a risk assessment.
The plan also includes a reform of the Delaney Clause, which governs FDA approval of pesticide levels in food. The Delaney Clause, enacted in 1958, imposes a "zero risk" standard and consequently prohibits the use of all cancer-causing pesticides on fresh fruits slated for processing. The Delaney Clause reform is backed by UFFVA and the Grocery Manufacturers of America, Washington.
Consumer advocates have expressed alarm that the regulatory reform passed by the House could impair the safety of the nation's food. Attempts to exempt the new meat and poultry inspection program, Hazard Analysis/Critical Control Point, from a House regulatory moratorium failed, as did similar attempts in a Senate committee. While the House moratorium would halt all new regulations retroactively from Nov. 20, 1994, through the end of 1995, a much narrower Senate proposal would give Congress 45 days to review major new regulations and stop them if it decides by majority vote that their costs don't outweigh their benefits. These two proposals must be reconciled. NAWGA prefers the House approach, Burke said.
Consumer advocacy group Public Voice for Food and Health Policy is backing a bill sponsored by Sen. Bill Bradley, D-N.J., that would require the Department of Agriculture to use scientific standards and testing to prevent contaminated meat and poultry from reaching consumers' tables. It would require slaughterhouses and processing plants to adopt HACCP procedures. It also would set voluntary guidelines for handling, processing and storage of meat and poultry for retailers. A similar House bill has been introduced by Reps. Robert Torricelli, D-N.J., and George Brown, D-Calif.
Another item expected to be brought before the Senate this year includes reform of the Superfund law. Backed by GMA, the bill would end the retroactive liability now imposed on manufacturers. "Grocery manufacturers dispose of a significant volume of waste that are low- to no-toxicity," said Elizabeth Seiler, director of environmental affairs at GMA.
Also expected to be considered is reform of OSHA, particularly proposed ergonomic regulations that would designate at-risk jobs and require businesses to provide equipment and make other accommodations to avoid worker injuries. "A host of OSHA regulations need to be clarified," said Burke of NAWGA. "OSHA needs to make itself more user-friendly to business. It needs to move away from its emphasis as a revenue collector."
Reform of FDA also is in the works. Grocery manufacturers are seeking labeling reform, implementation of HACCP and greater uniformity of food regulation at state, national and international levels. Sen. Nancy Kassebaum, R-Kan., chair of the Senate Labor Committee, already has convened hearings on FDA reform, though no legislation has yet been drafted.
While the intensity is expected to subside as the action moves to the Senate, Burke expects the industry to be busy monitoring Congress until the end of 1995. "By 1996, we'll be into the presidential election year, and so it's important to get substantive work done early," he said.
