FMI LOBBY CARRIED PLATEFUL OF HEATED ISSUES

JOYCE BARRETT

WASHINGTON (FNS) -- Reductions in the estate tax, new rules on tobacco sales and conversion of food stamps to an electronic system were on the minds of grocers who came to lobby Congress with the Food Marketing Institute here.

For Barry Scher, vice president of public affairs at Giant Food, Landover, Md., the primary concern was new federal regulations that will require retailers to check the identification of people suspected of being less than 27 years old who are buying cigarettes.

A House bill has been introduced that would stop enforcement of the tobacco regulation and Scher said he encouraged members of the Maryland and Virginia congressional delegations to back it.

Giant has close to 400 cigarette vending machines and recently spent about $200 updating each machine to take tokens instead of money, which would require cigarette buyers to go through a cashier. If the new law takes effect as written, Giant would lose that almost $80,000 investment, Scher said.

"We should have the opportunity to use our machines," he said. "We have found the tokens extremely effective in curtailing sales to minors." To curb sales to minors, Giant operates in-store sting operations, in which minors try to buy cigarette tokens from cashiers. If they are successful, an oral reprimand is given to the cashier. On the second offense, a written reprimand is issued, and if there are more than two sales to minors by one cashier, dismissal is an option. "We will fight to keep what we have," he said. "It is working."

On another matter, the federal food-stamp program is being converted to an electronic benefits system in which recipients will be given bank cards to redeem their benefits. Banks issuing the benefit cards are threatening to shift the costs of the cards to retailers.

Tony Fitzpatrick, director of human resources and loss prevention for Wayfield Foods, Lithia Springs, Ga., said retailers should not have to pay for the cards since they are already assisting the government by collecting sales taxes. "Food stamps represent a high percentage of our income," Fitzpatrick said. "Banking already is making a profit on the EBS [electronic benefits systems] equipment and cards, and they shouldn't be able to profit from the cards," he said. The FMI estimates that the fees banks are levying on the cards could amount to $250 million nationally.

James V. Olsen, president of the Utah Food Industry Association, said his delegation's main concern was a reduction or repeal of current estate taxes. Under current law, estate taxes can be as high as 55% of the value of a business. Many retail businesses were started after World War II, and the principals are now elderly and want to hand their businesses over to their children, Olsen said. Many such operations would have to go out of business if they are handed down under existing tax law, he said.

Christy Spoa of Save-A-Lot Store in Ellwood City, Pa., is one retailer who is confronting estate taxes. Spoa's father, who founded the business, is 92 years old, and Spoa wants something to be left of the business to hand down to his three children after it's handed down to him.

"If something happens to me, we won't be able to carry on the business," he said.

Other issues that drew the attention of grocers include a bill that would permit employers to give workers compensatory time off instead of paying overtime. The bill passed the House in a recent vote.

Another issue before the House advocated by the grocery industry is a massive plan to deregulate the electrical industry. This is not expected to pass this year but consideration has begun.

The FMI's meeting with congressional members was held last month.