NEWS WATCH: NEW MEXICO ASSOCIATION OPPOSED FOOD TAX REPEAL...PUBLIX INTERESTED IN BI-LO, BRUNO'S: REPORT...VENDOR ALLOWANCES TO BE FLAT IN 2004: STUDY 2004-03-01 (2)

NEW MEXICO ASSOCIATION OPPOSED FOOD TAX REPEAL

s Association said last week it did not support the state legislature's repeal late last month of a sales tax on food because it accompanied a 0.5% sales tax increase on all other items. Gene Valdez, the association's executive director, said his organization would have supported the measure if it had not been accompanied by the tax increase on nonfood items. In contrast, during a press conference following the 24-hour legislative marathon that included the food tax repeal, New Mexico Gov. Bill Richardson praised the legislators who "came through and finally eliminated the regressive tax on food, saving working families hundreds of dollars a year."

PUBLIX INTERESTED IN BI-LO, BRUNO'S: REPORT

LAKELAND, Fla. -- Publix Super Markets here has expressed interest in buying the two Southeastern divisions that troubled Netherlands-based Ahold put on the market last month, according to published reports. Asked about a possible purchase of Bi-Lo, Mauldin, S.C., and Bruno's, Birmingham, Ala., a Publix spokesman said, according to the reports, "Certainly, we would be looking at them. It's just too early to speculate now."

VENDOR ALLOWANCES TO BE FLAT IN 2004: STUDY

CHICAGO -- The amount paid by manufacturers in the form of vendor allowances is likely to remain flat in 2004 on a year-over-year basis, according to the annual industry review of manufacturers' trade allowances and price actions conducted by Promodata here, a market research firm. Rich Palesh, Promodata's president, also noted that average allowance size actually declined in 2003 in the largest product area it tracks, dry grocery. "It appears that aggressive alternate-channel pricing is forcing self-imposed restraints on allowance levels," he observed.

SEC SANCTIONS THREE FORMER RALPHS EXECUTIVES

WASHINGTON -- The Securities and Exchange Commission here said last week it has sanctioned three former executives at Ralphs Grocery Co., a subsidiary of Kroger Co., for bookkeeping violations between 1998 and the first two quarters of 2000. The SEC said the three executives -- Christopher Hall, Steven Mortensen and Steven Stork, who held various positions in Ralphs' finance department -- consented to the sanctions without admitting guilt as part of their settlements with the government regulator. When their violations were unveiled in 2001, Kroger had to restate earnings for the previous three years.

CALIF. COSTCO WAREHOUSE WORKERS RATIFY CONTRACT

ISSAQUAH, Wash. -- Workers in the 39 California warehouses operated by Costco Wholesale Corp. here have voted by a 94% margin to ratify a new three-year contract, the Teamsters union, Washington, said last week. The union added that the contract, which covers approximately 12,000 Costco employees, includes wage increases in each year, increased semi-annual bonuses, increased pensions and increased vacation time. The union noted that last September, 3,500 Teamsters working for Costco in four East Coast states ratified a similar contract.

YUCAIPA CLOSES SALE OF LAST FOOD INDUSTRY ASSET

IRVINE, Calif. -- Golden State Foods here said last week that Wetterau Associates, St. Louis, an investment group led by Mark Wetterau, GSF's chief executive officer, has completed the purchase of the 50.3% stake in GSF held by Yucaipa Cos., Los Angeles. The move means that for the moment at least Yucaipa, which has owned a variety of food retailers, is out of the food industry. However, Ron Burkle, Yucaipa's managing partner, left open the possibility of the company's return. "I look forward to the next opportunity we have to work with Mark Wetterau and his team," Burkle said. GSF is a food processing and distribution company that had sales of $2 billion last year.