The nation's political focus is centered on the incoming administration and Congress in Washington, but you'd be missing some of this year's hottest developments if you only looked there. Expect to see reinvigorated political activity at the state and local levels that could have a major impact on the food distribution business.
Why will states play a starring role? President-elect Bush is a proponent of shifting more power to states and localities, continuing a recent tradition that began with the presidential administration of another former governor, Ronald Reagan.
Also, a number of groups that heavily supported the candidacy of Al Gore, including labor unions, may determine they will not get anywhere in Washington with a Republican president and Congress. Such groups are likely to push parts of their agendas at the local levels with hopes that fewer people are watching.
Why should food distribution executives care if a state or locality is taking on an issue that's important to the national industry? Tim Hammonds, president and chief executive officer of the Food Marketing Institute, Washington, provided an example of how state-level action can have reverberations throughout the food industry. If you have new food regulations enacted in a few states, this could burden retailers and manufacturers who sell products and operate in multiple states, he explained. They eventually may come to Washington D.C. to seek preemptive Federal legislation to enact the new state laws across the country in order to bring uniformity to the situation. Even if they don't like the new state rules, they would prefer uniformity to chaos. So local action becomes a successful strategy of lobbying groups.
Hammonds was interviewed in advance of this week's FMI Midwinter Executive Conference in Boca Raton, Fla. For the interview story see Page 12.
The FMI has seen state-level battles before. Last year, upper Midwest meat producers and California produce companies pushed country-of-origin labeling to block imports. "Food retailers looked at this as a form of nontariff trade barrier that our trading partners would retaliate over," Hammonds said. So FMI worked on more positive approaches. For example, it worked with the cattle industry to develop a buy-U.S. program.
Currently, food wholesalers are very concerned about the state-led issue of diesel fuel regulations. California and about 14 other states are completing legislation that would require cleaner diesel fuels and cleaner engines for trucks, according to Kevin Burke, vice president, government relations, Food Distributors International, Falls Church, Va. "About 91% of our members use diesel vehicles," Burke said. "When there are different standards from state to state it makes it difficult for any company that operates interstate. It's a cost and logistics and tax issue."
What other key food industry issues will find a forum in states and localities this year? It's hard to say, but Hammonds suggests that food safety, food labeling, irradiation and biotechnology are prime candidates.
The industry is wise to continue tracking these developments and to accelerate the effort. Its big advantage is a wide network of organizations, which also include the Food Industry Association Executives and National Grocers Association. This network must continue to alert companies about developments through mailings, e-mails, Web sites and meetings. Then supermarket executives can follow events in Washington knowing that the other bases are covered.