WASHINGTON (FNS) -- Government cost-cutting in the Women, Infants and Children program could eliminate branded products from the program and narrow consumer choice, a Grocery Manufacturers of America official told a House panel last week.
Claire Regan, senior director of scientific and regulatory affairs for the GMA here, told the House Committee on Education and the Workforce that restricting benefits granted under the Women, Infants and Children program would limit the program to generic products.
"Many of these mothers do their shopping at small inner-city stores or live in rural areas where required generics might not be available," Regan said. "This hurts access to the essential nutrients needed by WIC participants."
The House panel has jurisdiction over the WIC program, which like all government feeding programs has been under pressure to reduce costs. The program is up for reauthorization this year, and the supermarket industry wants to ensure that any spending cuts don't prohibit use of branded products.
In seeking to reduce program costs, some state administrators are considering reforms that would eliminate branded products from the WIC programs. The Clinton administration also has signaled to Congress that cost cutting is a priority and has said it aims to reduce the cost of the food package by 10% by 2002, and is encouraging the use of store brands as a way to save money.
Another cost-cutting method being considered by states is a reduction in selections or shifting to single suppliers or requiring manufacturers to pay rebates to participate in the program.
Regan pointed out that when Texas WIC administrators removed a national-brand cereal from their program a few years ago, overall cereal consumption in the state fell dramatically.
Consequently, state officials reinstated the product, Regan said.
Generics would not serve the targeted population, Regan said, because often children will only eat branded products, and generics aren't readily available in all stores and so could reduce the nutritional value of the food program.
Regan criticized programs under way in several states that require food companies to bid for the right to be sole provider of a product.
"As a result, the losing companies may lose shelf space and thus sales to both WIC and non-WIC customers," she said.
Regan also said that the bidding process was "antithetical" to America's free market economy.
"The invitation to bid means that a company's access to a state's market is based not on consumer choice, price competition or on quality of product, but on the government decision-makers. Companies are forced to bid a high rebate to retain their access to markets and gain shelf space. In fact, in some states, the rebate level is almost identical to the wholesale price of the product. This system eliminates the competition from the marketplace and it eliminates the ability of the winning firm to receive a fair return on the sale."
