2009July 2009

More Ways to IFRA now offers discounted programs for:

Look for these in the mail:

Jamie Candos630.285.3671jamie_candos@ajg.com

Dean Clune630.285.3442dean_clune@ajg.com

John Jurik630.285.4438john_jurik@ajg.com

Visit our website at: www.gallagherbenefi ts.com/Itasca/EmergingMarketsFacebook our group: IFRATwitter us at: IFRAupdates

LIFEINSURANCE

401K VISIONSHORTTERMDISABIL ITY

LONGTERM DISABILITY

DENTALVOLUNTARYPROGRAMS PROPERTYPROPERTYPROPERTY

& CASUALTY& CASUALTY& CASUALTY

Lifeinsurance

INDIVIDUALMEDICAL VISION

SHORTTERMDiSabil iTy

LONgTERM DisabiLiTy

DENTAL PROPERTY& CASUALTY

Purchase Quality when you shop with IFRA

401KGROUPHEALTHI N S U R A N C E

VOLUNTARYBENEFITS

WORKERSC O m p E n S at i O n

save!

The IFRA Insurance Purchasing Cooperative was established to assist members by providing quality employee benefi ts and immediate cost reductions.

In addition to the discounted programs, IFRA also partners with Gallagher on Individual Medical and Group Health Plans.

For more information, please contact:

IFRA-GMA Annual Conference and Golf Outing: Sept. 29-30Take time to learn . . . and grow

IFRA/GMA Conferences are all about you and your business. One day of seminars will teach you to:n Emerge from the Recession by Connecting with Customersn Use New Forms of Media for Sellingn Improve Loss Prevention Techniques and much more...

IFRA-GMA Conference registration materials were recently mailed to all members. If you did not receive yours, call the IFRA office at 630-627-8100 to have one mailed to you. Register today and don't miss out on this information-packed Conference.

Golf Outing: Odyssey Country Club Tinley Park, IL

Annual Conference: Drury Lane Theatre & Conference Center, Oakbrook Terrace, IL

See pages 4-5 for a complete program

When You Shop with IFRA

The Illinois Food Retailers Association has partnered with Gallagher to put together discounted programs for purchasing your Employee Benefits, 401(k) and Property Casualty.Join your fellow Independent Retailers to gain leverage and economies of scale.For more information, please contact:Jamie Candos Dean Clune John Jurik Steve GabinskiBenefits Benefits&401(k) 401(k) Property&Casualty630-285-3671 630-285-3442 630-285-4438 630-285-3686Jamie_Candos Dean_Clune John_Jurik Steve_Gabinski@aig.com @aig.com @aig.com @aig.com

Visit our website at: www.gallagherbenefits.com/Itasca/Emerging MarketsFind us on Twitter: IFRAupdatesFacebook our group: IFRA

Your customers are looking to save money; shouldn't you be doing the same?

©Illinois Food Retailers Association/Page 2©Illinois Food Retailers Association/Page 2continued 2

In one of the busiest weeks of this Congressional session, over 230 retailers, wholesalers and state association executives,

along with N.G.A. and FMI staff, met with members of Congress during the Washington Public Policy Conference, June 8-10, 2009. A full day of appointments was scheduled to urge defeat of the Employee Free Choice Act, passage of Credit Card Interchange Fee reform, support for Food Safety legislation and to request an increase in the Estate Tax exemption for family-owned businesses from $3.5 million to $5 million per individual and lower the rates from 45 percent to 35 percent.

During the week, Senator Kennedy (D-MA) released the draft of the Affordable Health Choices Act, giving the public one of the first opportunities to evaluate what will be in the Senate legislation before it is brought to the Senate floor in July, and Senator Dick Durbin (D-IL) introduced S. 1212, the Credit Card Fair Fee Act.

Special thanks to IFRA members Rich and Connie Niemann, Sr., Niemann Foods; Mike Schuette, Schuette Stores; Dean Clune, Gallagher Benefit Services, Inc.; and Mike Erlandson, SuperValu, for representing the Illinois Food Retailers Association.

Employee Free Choice ActSenator Harkin Pushing to Bring EFCA to Senate Floor in July

Efforts to Forge a So-Called "Compromise" Continue in Earnest

Senator Tom Harkin (D-IA) has signaled that he intends to bring S. 560, the Employee Free Choice Act (EFCA), to a vote on the Senate floor in July. Harkin had originally hoped to bring

2009 Washington Conference

the bill to the floor for a vote in June, but the bill continues to lack enough support to pass a cloture vote. In an effort to garner additional support from select Democrats, a number of Senators, including Harkin, Mark Pryor (D-AR) and Arlen Specter (D-PA), have been meeting to forge compromise language.

The Industry remains vehemently opposed to the Employee Free Choice Act, commonly referred to as Card Check. The right to a private ballot is a cornerstone of our democracy. It is the American standard at the ballot box, allowing voters to make tough and even controversial election choices without fear of reprisal or intimidation.

Equally erroneous is the legislation's requirement imposing contract terms on employers through a process of mandatory, binding arbitration. If an employer and union are engaged in bargaining for their first collective bargaining agreement and are unable to reach an agreement in 120 days, the dispute is then referred to binding arbitration and results are binding for two years.

Retailers made it clear at the Washington Public Policy Conference

that compromise on the principles of EFCA was unacceptable. Because of this continued pressure, Democrats continue to be just shy of enough votes to pass cloture on EFCA. So called "compromises" are nothing more than a repacking of the original legislation and must be defeated.

Interchange Fee ReformSenator Durbin Introduces Credit Card Interchange Legislation

On Tuesday, June 9, while conference attendees

were on Capitol Hill, Senator Dick Durbin (D-IL) introduced S. 1212, the Credit Card Fair Fee Act of 2009, in an effort to level the playing field for merchants against Visa, MasterCard and their issuing banks. Senator Durbin has been a leading advocate in the Senate for reform of Credit Card Interchange Fees. S. 1212 would give merchants an antitrust exemption to allow them to collectively negotiate with Visa and MasterCard over terms and rates. House Judiciary Committee Chairman John Conyers, together with Representative

Retailers and Wholesalers Meet with Members of Congress

Meeting with U.S. Representative John Shimkus (right) are, left to right: Rich Niemann, Sr., Niemann Foods; Mike Schuette, Schuette Stores; and Mike Erlandson, SuperValu.

©Illinois Food Retailers Association/Page 3©Illinois Food Retailers Association/Page 3

Bill Shuster (R-PA), has introduced a similar bill, H.R. 2695, in the House.

"Higher interchange fees mean higher costs for retailers and consumers," said Durbin. "Every time you make a purchase with plastic, the bank that issued your credit card gets a cut of the sale amount. American businesses and consumers are getting nickled and dimed by the big banks who end up making billions from these hidden fees. Interchange fees need to be fairly and transparently negotiated between the merchants and the credit card companies, so working Americans don't get shortchanged."

During the Washington Conference, association members continued to educate their Congressmen about the negative effect Interchange fees have on their businesses, and subsequently, consumers. Members of the House and Senate were asked to support businesses and consumers by co-sponsoring H.R. 2695, H.R. 2382, and S. 1212 respectively.

All assocation members are encouraged to ask their Representatives to co-sponsor H.R. 2695 and H.R. 2382 and ask their Senators to co-sponsor S. 1212.

Food SafetyHouse Subcommittee Advances Food Safety Legislation; FDA User Fees Reduced

The House Energy and Commerce Health Subcommittee approved H.R.

2749, the Food Safety Enhancement Act of 2009, after agreeing to a number of Republican requests, including scaling back proposed FDA "user fees" from $1,000 per facility to $500. The legislation considers a "facility" any place where food is manufactured, processed, packed or held, and generally would affect wholesalers upstream to manufacturers. Republican committee members remain opposed to civil penalties in the bill, including civil fines up to $500,000 for unintended violations that result in no harm. Other concerns include mandatory electronic traceability, and the frequency of FDA inspections, which could prove to be cost-prohibitive.

Legislation for FDA to Regulate Tobacco Products Heads to President's Desk

On June 11, the Senate passed legislation by a 79-17 margin to give the FDA power to regulate tobacco products. The bill now heads to the President's desk for President Obama's signature. Among other things, the legislation includes mandated industry fees to pay for enforcement of strict new rules, such as prohibiting candy- and fruit-flavored cigarettes. Menthol is not initially banned, but a FDA panel will be set up to report within one year whether it should be banned. The legislation will also require new restrictions on advertising and require larger safety disclaimers on tobacco products.

Health CareHealthcare Debate Heats Up: Employer Mandates, Public Plan Options Proposed

As Congress continues to work toward crafting health care legislation, a number of proposals are beginning to come to light. During the general session at the Washington Conference, a number of retailers and wholesalers expressed concern over proposed employer mandates in questions directed to Representative Frank Pallone (D-NJ). Proposals would require employers to either provide healthcare for employees or pay a fine to the government. Employer mandates could have a detrimental effect on businesses, especially small businesses and businesses with small profit margins, such as the supermarket industry.

Recently, Senator Kennedy released a draft of legislation, the Affordable Health Choices Act, which is expected to be combined into a single healthcare bill with aspects from a yet-to-be-released draft bill from Senate Finance Chairman Baucus. Senator Kennedy's draft includes, among other things, an employer mandate to provide health insurance, a tax on employer-provided health benefits to help pay for expanded coverage to the uninsured and individual mandates to obtain health insurance. The legislation does expand public healthcare programs, but does not include a public plan to compete directly with private insurers.

Democrats and Republicans continue to be at odds over the public versus private plan. Recently, the idea of a non-profit "co-op" was suggested in an effort to bridge the gap between Democrats and Republicans that would be a private sector operation, but government-backed to give it stability. President Obama continues to push Congress to pass comprehensive healthcare reform this year.

Rich and Connie Niemann, Niemann Foods, left and center, meet with Senator Dick Durbin during the Washington Conference.

©Illinois Food Retailers Association/Page 4

The members of the Illinois Food Retailers Association and the Grocery Merchandising Association are cordially invited to attend our 2009 Annual Fall Conference. With educational programs designed to help you guide the future of your business in a challenging market — and the opportunity to speak one-on-one with other members of the industry — you won’t want to miss this once-a-year event.

Day OneEnjoy a fun-filled day of golf, great food and prizes while you network and share ideas with other members.

Day TwoAttend information-packed educational sessions that benefit industry members of all types.Just one day of sessions gives you:

n Educational seminars that address the most critical food industry

issues.

n Admittance to the Expo floor featuring the latest industry trends

and products.

n The opportunity to participate in honoring industry members at the Gala Awards Banquet.

Please plan to join us on Tuesday, September 29, at the Odyssey Country Club in Tinley Park, and Wednesday, September 30, at the Drury Lane Theatre and Conference Center in Oakbrook Terrace.

Emerging from the Recession:“Connecting with Your Customers this Holiday Season and Beyond”

Selling to Consumers in the New Century: “Reaching Consumers through New Media”

Best Practices for Tactical Loss Prevention: “From Back Door Receiving to Front End – Developing a Shrink Awareness and Prevention Culture”

Grocery Merchandising Association

Illinois Food Retailers Association with Co-Host

2009 Annual Conference2009 Annual Conference

Tuesday, September 29 and Wednesday, September 30Seminars

“Practical Loss Prevention”Speaker: Larry Miller,

RetailControl.com

“Emerging from the Recession”

Speaker: Christine A. Walsh, SuperValu

Evening Banquet

©Illinois Food Retailers Association/Page 5

Day 1 Tuesday, September 29

Day 2 Wednesday, September 30Drury Lane Conference CenterOakbrook Terrace, IL 7:30 am Board of Directors Meeting 8:00 am Exhibitors continue set up 8:40 am General Sessions Emerging from the Recession: “Connecting with Your

Customers this Holiday Season and Beyond.” Speaker: Christine A. Walsh, Director of Independent

Marketing and Education, SuperValu

9:50 am Selling to Consumers in the New Century: “Reaching Consumers through New Media.” Presenters: Stevens & Tate Marketing and a Panel of Search Internet Advertising and other Media Consultants

11:00 am Best Practices for Tactical Loss Prevention: “From Back Door Receiving to Front End – Developing a Shrink Awareness and Prevention Culture.” Speaker: Larry Miller, RetailControl.com

12:00 - 3:00 pm Expo Open—See the latest industry products and services

3:30 pm General Session The Total Store Manager: “For Improved Customer

Satisfaction and Added Profits.” Speaker: Larry Miller, RetailControl.com

4:30 pm Cocktail Reception Music provided by Guitarola

6:00 pm Evening Banquet – Industry Recognitions: IFRA Outgoing Chairman Mike Schuette, Schuette Stores

GMA Outgoing President Rich Werhand, Crossmark Sales & Marketing

Special Entertainment Bobby Hunt, Former Ringling Bros. Stunt Comedian and

International Juggler

Golf OutingOdyssey Country Club Tinley Park, IL

11:00 am Golf Tournament Odyssey Country Club Enjoy a challenging round of golf with industry partners.

Buffet Lunch

12:30 pm Shot Gun Start

1:00 pm Exhibitors set up at the Drury Lane Conference Center

5:30 pm Cocktail Reception Odyssey Country Club cash bar

6:00 pm Buffet Dinner Odyssey Country Club

The 2009 Conference Committee

Vic DeGuilioDean Foods Company

Paul Lagestee Walt’s Food Centers

Rich Morris SuperValu Midwest

Rich Niemann, Jr.Niemann Foods

Mike O’NeillCentral Grocers

Art PotashPotash Bros. Market

Phil Salerno Family Foods

Mike Schuette Schuette Stores

Dave Wilkinson Strack & Van Til

Program of Events

Grocery Merchandising Association

Illinois Food Retailers Association with Co-Host

2009 Annual Conference2009 Annual Conference

Golf Outing

©Illinois Food Retailers Association/Page 6continued 2

You are probably aware that state enforcement agencies are conducting country of origin

labeling inspections.

Between now and November 2009, the 50 state enforcement agencies will conduct 5,000 store reviews and 200 supplier audits. Inspectors from the Illinois Department of Agriculture will inspect Illinois stores.

Officials conducting the compliance review will introduce themselves to store management, hold an opening meeting, review product records for compliance, provide a checklist to retailers in a closing meeting, and after the review meeting, submit the report to USDA. The USDA will then send a non-compliance notification letter, if warranted, to the retailer. A retailer will have 30 days to respond to a non-compliance notification letter indicating the corrective and preventive action that should be taken to correct areas of non-compliance. Retailers will only be subject to fines for willful violations that include failure to respond to USDA within the 30 days, or to continued willful violation of the regulations.

A member store recently received a COOL inspection. The four-hour inspection included:

n Inspection of produce invoices and meat invoices, and master container labeling.

n Inspection for proper labeling on covered items in the meat depart-ment and produce department.

n A considerable amount of inspec-tion time for labeling on products in the frozen food case—unseasoned frozen french fries, frozen fruits and vegetables (frozen spinach, frozen chopped onions, white corn).

Pursuant to the regulation, the inspector conducted a closing meeting with store management, reviewed what was wrong,

and informed them that the USDA would be sending a notification letter.

The inspector's inspection report covers 13 reason codes for non-compliance:1. Covered commodity is not identified

with country of origin.2. The country of origin declaration is

not legible and/or is not placed in a conspicuous location.

3. The country of origin declaration is not accurate.

4. The country of origin is not stated in an acceptable form (the use of "or" and "and/or" is not acceptable).

5. Abbreviations and variant spellings do not unmistakably indicate the country of origin.

6. Covered commodity was not identi-fied with the method of production.

7. The method of production declara-tion was not placed in a conspicuous location.

8. The method of production declara-tion is not accurate.

9. The method of production was not stated in an acceptable form (i.e. wild, wild caught, farmed, farm-raised, etc.).

Non-Compliance Findings 10-13 (below) apply to recordkeeping. (If item is pre-labeled, the label is sufficient evidence of COOL claims.)10. Records were not provided within

five business days.11. Records do not provide the country

of origin information.12. Records do not provide the method

of production information.13. Records do not provide the supplier

information. (Supplier records are required for all Traceback items.)

A word of caution: n Check compliance for Compliance

Code #1—"Covered Commodity is not Identified with Country of Origin." Make sure your stores are identifying country of origin for covered commodities; and

n Check compliance for Compliance Code #3—"The Country of Origin Declaration is Not Accurate." If invoices and master containers for meat shipments are labeled "Product USA-Canada," make sure your meat case labeling states the same.

Summary of the Mandatory Country of Origin Labeling (COOL) Final RuleThe 2002 and 2008 Farm Bill amended the Agricultural Marketing Act of 1946 (Act) to require designated retailers to notify their customers of the country(ies) of origin and method(s) of production (wild or farm raised as applicable) of covered commodities. Covered commodities include muscle cuts of beef (including veal), lamb, chicken, goat and

COOL ENFORCEMENTProduct

of Chile

“A retailer will have 30 days to respond

to a non-compliance notification letter

indicating the corrective and

preventive action that should be taken

to correct areas of non-compliance.”

©Illinois Food Retailers Association/Page 7

The Monthly Report is the official member publication of the Illlinois Food Retailers Association1919 S. Highland Ave.Lombard, IL 60148

Telephone: 630-627-8100Toll free in IL: 800-624-6712www.ilfood.org

Editorial communications welcome

pork; ground beef, ground lamb, ground chicken, ground goat and ground pork; wild and farm-raised fish and shellfish; perishable agricultural commodities; macadamia nuts; pecans; ginseng; and peanuts. Covered commodities are exempt from COOL requirements if they are an ingredient in a processed food item. Retailers determined to be in violation of the Act must be notified of the violation and provided with a 30-day period during which they may take the necessary steps to comply. If upon completion of the 30-day period it is determined that the retailer has willfully violated the Act, the retailer may be fined up to $1,000 for each violation.

Identification RequirementsTo convey the country of origin and method of production information, retailers may use a placard, sign, label, sticker, band, twist tie, pin tag, stamp, mark, or other clear and visible sign on the covered commodity or on the package, display, holding unit, or bin containing the commodity at final point of sale to consumers. The declaration

of the country(ies) of origin and method(s) of production may be typed, printed or handwritten, provided it is in conformance with other Federal labeling laws and does not obscure other required labeling information. The declaration for country of origin and method of production must be legible and placed in a conspicuous location, so as to render it likely to be read and understood by a customer under normal conditions of purchase.

Recordkeeping Requirements

Upon request by USDA representatives, suppliers and retailers subject to this Act shall make records available that verify the COOL claims and provide supplier information. Such records may be maintained in any location and shall be provided within five business days of the request. For pre-labeled products, the label itself is sufficient evidence on which the retailer may rely to establish the product’s country of origin and method of production.

For items that are not pre-labeled, or if the information from the pre-labeled container is not available, documentation must be available which specifies the product, country of origin and method of production, and some form of tracking that links the documentation to the covered commodity. Records must be maintained for a period of one year from the date the declaration is made at retail.

Types of Findings

n Failure to label covered commodities for country of origin and method of production (as applicable).

n Covered commodities are mislabeled for the country of origin and method of production (as applicable).

n Failure to maintain records that substantiate the COOL claims and provide supplier information.

If you have additional questions about COOL, please call the IFRA office at 630-627-8100.

The GS1 DataBar readiness survey was disseminated mid-March 2009 to the industry to solicit feedback pertaining to retailer/manufacturer readiness for the January 1, 2010 implementation of the GS1 DataBar on coupons.

The response data from this survey suggests that removal of the UPC-A barcode beginning January 1, 2010, will create a significant hardship for many retailers who may not be equipped to scan the new GS1 DataBar by this date. For this reason, the Joint Industry Coupon Committee (JICC) recommends that the UPC-A barcode not be removed from coupons beginning January 1, 2010. The JICC recommends a deferred implementation date of

GMA Supports Deferring GS1 DataBar Implementation for Coupons, Calls for Industry Comment

January 1, 2011, to help ensure that the industry has enough time to prepare for proper implementation of the GS1 DataBar.

The JICC recommendation to defer implementation should not dissuade ready retailers that are eager to capitalize on the additional capabilities of the DataBar from beginning to scan the new symbol on or before January 1, 2010.

The Joint Industry Coupon Committee works to increase efficiency and effectiveness in the development, distribution and redemption of coupons. It is comprised of individuals from retailers and manufacturers who oversee coupon programs and includes

representatives from GMA, Food Marketing Institute, National Grocers Association and National Association of Chain Drug Stores.

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