Cashiers smiled as they welcomed customers to the Foods Co supermarket in East Oakland during the much-anticipated opening of the 75,000-square-foot store just over a month ago. Grocers showed off stacks of colorful fresh fruits and vegetables, the kind of nutritious foods residents said were impossible to find on the liquor-store shelves that were previously their only neighborhood option.

Then the Foods Co grudgingly began turning away some of their neediest shoppers.

The celebrated new store – like many others across the state – is caught up in California’s drive to clean up a federally funded program it administers, the Special Supplemental Nutrition Program for Women, Infants, and Children, which gives low-income pregnant women and new moms vouchers to pay for specific healthful food items, such as low-fat milk, eggs and fresh produce.

Stores must apply for state permission to accept the WIC vouchers from customers. But for the past three years, the federal government has placed a moratorium on new store applications in California because the state has been unable to adequately monitor existing stores amid complaints of price-gouging. Among the complaints were some that vendors offered WIC participants questionable incentives to shop at their stores and then inflated the price of WIC items charged to the state.

Profit-driven vendors reaped $90 million in unnecessarily high reimbursements in one year alone – a bill footed by taxpayers – according to the California Department of Public Health, which oversees the state’s WIC program. The troublesome vendors mostly consisted of small stores – like liquor stores and corner markets – which flooded the state with applications to become WIC vendors. Between 2007 and 2012, state-approved small vendors grew nearly 300 percent to 1,326 stores selling food to WIC customers.

Now, some grocers say, the lengthy process the state has undergone to shed bad apples in the food program has them hesitant to open new stores in California, particularly in poor communities where many residents rely on WIC vouchers.

In East Oakland, shoppers looking for deals at Foods Co sometimes end up having to use their WIC vouchers at higher-priced places, like the Chico’s Discount Liquor store 3 miles away.

“It will cost us all more money when people use their WIC vouchers at places like that, and you get less product for your voucher,” said state Sen. Holly Mitchell, a Democrat from Los Angeles who is among the state lawmakers who have pushed for an end to the federal moratorium.

A spokesperson for the U.S. Department of Food and Agriculture‘s Food and Nutrition Services department said California has made “significant progress” in cleaning up the state’s WIC program. As a result, the moratorium could be lifted this summer.

But much remains up in the air.

For a while, it seemed that every store wanted to participate in WIC. And it took California a while to grasp why.

Gaming the system

WIC is designed to supplement the diet of pregnant women and new moms and their young children with specific nutritious foods, such as vitamin C-rich fruit, eggs, milk, cheese and beans.

WIC is intended to create healthy eating habits by providing vouchers for nutritious foods, hosting educational classes and promoting the benefits of breastfeeding, all of which have long-term health benefits.

“You can’t get soda or potato chips” with a WIC voucher, said Laurie True, executive director of the California WIC Association, a nonprofit formed by directors of local WIC agencies. The California WIC Association drew attention to complaints of abuse in the WIC system and supports a moratorium in order to weed it out.

The sharp rise in stores looking to participate in WIC came mostly from small shops, such as liquor stores. “Certain types of store owners figured out how to game the system, and that was driving food costs up,” True said. “There were hundreds of these stores being approved, and the state was on autopilot approving them.”

Customers reported seeing significantly higher prices on milk and other products sold to WIC customers, while cash-paying customers were charged less for the same items.

As California’s economy recovered from the recession, True said the inflated food prices threatened to curtail the number of families WIC could serve.

1.4 million users

California’s WIC program runs on $850 million in federal funds and partners with infant formula manufacturers to receive another $250 million. Each month, food vouchers with a $60 retail value are sent to 1.4 million people enrolled in WIC in California.

As True points out, there is little incentive in the WIC program for participants to bargain-shop. WIC’s vouchers do not have a price affixed to them. Instead, they specify what a person can receive from a participating store, such as low-fat milk, specific brands of cereal like Cheerios or Corn Flakes, and whole grains like corn tortillas or oatmeal.

The store then tells the state the cost of items purchased, although there is a maximum reimbursement rate based on prices at similar stores. When more stores charged the most allowed, that inflated the average prices used when recalculating the maximum reimbursements.

Probing complaints

In 2011, with food prices rising and applications from stores soaring, California imposed a moratorium on new vendors while officials investigated complaints of inflated costs and fraud.

By early 2012, California attempted to lift the moratorium, but USDA officials ordered it to remain in place, saying the state needed better oversight and lower reimbursement rates. The USDA required California to reduce the maximum price small vendors could be reimbursed, an action that True said highlighted the extent of the price-gouging problem.

In the first year, the California’s WIC program saved $90 million.

Cassaundra Peoples and her fiance, Toby Evans, walked into Foods Co in East Oakland for the first time on a recent day and headed straight for the clerk to check the store’s WIC status. It didn’t stop them from shopping, but it did keep them from purchasing milk, produce and bread there.

The couple relies on WIC to feed their 2-year-old granddaughter, Zamiyah Gordon-Evans.

“We only have two carts,” Peoples, who works at the Oakland airport, said as the family walked out of the store. “If they took WIC here, we’d have three. And now we got to stop somewhere to get the WIC (items).”

Evans, who works at a Costco warehouse, said he didn’t understand why the state wouldn’t allow the East Oakland store to accept WIC.

“This is the right neighborhood for it,” he said. “A lot of people here need it.”

Ron Fong, president of the California Grocers Association, said many times customers blame the store for not accepting WIC, which is bad for business. He said it’s not easy for customers, particularly for those who take public transit, to make multiple trips for groceries.

Fong said grocery stores lose 15 to 30 percent of their business when they can’t accept WIC, since many customers buy other products in addition to voucher items.

And that makes grocery store owners hesitant to open new stores in California, particularly in low-income areas.

Eric Lindberg, co-CEO of Grocery Outlet, said his company has slowed its growth in California because of the moratorium.

“The worst part about it is that Grocery Outlet’s proposition is to sell groceries at lower prices than other retail,” Lindberg said.

Melody Gutierrez and Will Kane are San Francisco Chronicle staff writers.
E-mail: [email protected], [email protected]
Twitter: @MelodyGutierrez

A big celebration was held Monday for the grand opening of the Northgate Gonzalez Market in South Los Angeles, which will provide the community with a healthy variety of food choices and 130 new jobs.

“It brings a different type of education as far as your shopping and your shopping experience, and it gives you more diverse choices,” meat cutter Ivan Neeley said.

The shopping plaza is named after Juanita Tate, who founded the group Concerned Citizens of South Central Los Angeles.

She died nearly a decade ago. On Monday, her daughter celebrated her birthday with this gift to the community.

“This is just a fulfillment of a promise made 25 years ago to this community that we would provide decent, quality produce, we would provide good quality food,” Noreen McClendon, Executive Director, Concerned Citizens of South Central LA said.

Not only is it providing healthy options in a neighborhood that doesn’t have many, it’s also giving former gang members a second chance.

“There’s not a lot of jobs out here for us people from the neighborhood and a lot of people stereoptype us,” said Angel Garcia, who works as a cook.

The Northgate Gonzalez organization and the California Fresh Works Fund, along with the city, have committed to hiring members of Homeboy Industries at the grocery store.

“I made a lot of bad decisions in the past.” said meat clerk Orsy Jerez. “Now that I’m here, I want to prove to them that they are able to hire me, and they are able to hire more homeboys.”

Community leaders are hoping new opportunities and better access to nutrition bring positive change to the neighborhood.

“My mom was always about hope,” McClendon said. “When this was a scrap metal yard in a vacant lot, she saw hope. She saw a better way for this community. She saw bigger, she saw better.

Reprinted from KABC-TV (April 14, 2014)

In September 2013, the Federal Drug Administration (FDA) released information suggesting the presence of arsenic in rice. This week, Consumer Advocacy Group, Inc., a non-profit organization that files numerous Proposition 65 lawsuits every year, issued notices of violation alleging that companies—including grocers—violated California law by selling rice containing arsenic without a Prop 65 warning. Consumer Advocacy issued similar notices in late 2013 and may very well issue more in the near future.

Prop 65 requires businesses to place a warning on products containing chemicals known to the State of California to cause cancer or reproductive toxicity. California maintains a list of such chemicals, which numbers over 800 chemicals and includes arsenic. For more information on this list of chemicals, click here.

Unlike other consumer product safety regulations, private individuals and organizations, such as Consumer Advocacy, can enforce Prop 65. Indeed, Consumer Advocacy files multiple lawsuits a year with the intention of extracting settlements from companies in the targeted industry. Nonetheless, below are several defenses available in response to such a lawsuit as follows:

Safe Harbor Exception: Prop 65 provides for allowable levels of listed chemicals to exist in food products. According to the FDA, rice and rice products contained an average of 0.1 to 7.2 micrograms of inorganic arsenic. The Safe Harbor Level set by the Office of Environmental Health Hazard Assessment is 10 micrograms per day. If the FDA’s data is accurate, there may be a Safe Harbor Exception defense.

Naturally Occurring Defense: A chemical is “naturally occurring” if it is “a natural constituent of food, or if it is present in food solely as the result of absorption or accumulation of the chemical which is naturally present in the environment in which the food is raise, or grown, or obtained.” Cal. Code of Regs. Tit. 27 § 25501(a)(1). Arsenic is naturally found in soil and water and is absorbed by plants regardless of the growing practice. As a result, this defense is a feasible and colorable response to a Consumer Advocacy-issued Prop 65 notice.
Grocers may have received Consumer Advocacy-issued Prop 65 notices of violation. In this instance, the targeted product is rice. However, given the list of 800 chemicals on California’s Prop 65 list and over-zealous efforts of organizations like Consumer Advocacy, grocers can expect further Prop 65 notices and should be prepared to respond.

This article was authored by Melissa Thorme and Justin Delacruz, attorneys in Downey Brand LLP’s Food and Agriculture Practice. Melissa is a partner who practice focuses in the areas of water quality, wastewater, agricultural runoff, permitting, enforcement defense and agricultural law, including Prop 65 defense. She may be reached by email at [email protected]. Justin focuses his practice in the area of commercial litigation representing and advising food producers, processors and retailers. He may be reached by email at [email protected]. Melissa and Justin may be reached by phone at (916) 444-1000.

CGA member Northgate González Markets, which operates 38 supermarkets in Southern California, was the recipient of the 2014 “Ben Schwartz Retail Grocery Visionary Award” from Unified Grocers at a special awards dinner last night at Tamayo Restaurant in Los Angeles. This is the ninth year that Unified has presented the award to an outstanding independent retailer.

The annual award is named after Ben Schwartz, a former Chairman of the Board of Unified Grocers. It is an honor given to an independent retail grocer or grocery company that is a leader and innovator in the retail grocery industry. The award recognizes retailers who, by their practice and example, have consistently demonstrated initiative, creativity and leadership within their businesses and, in the process, have inspired others to think and act creatively and with passion in the grocery field. To be eligible, retailers must be — or have been — a member of Unified Grocers or one of its predecessor companies.

In presenting the award, Bob Ling, President and Chief Executive Officer, Unified Grocers, said that in addition to being an outstanding retailer, Northgate thrives because the González family have a strong set of values that define who they are and shapes everything they do.

“The award carries name of a true retail visionary. The idea behind it is to recognize someone in our retail community who exemplifies Ben Schwartz’s spirit, character and ultimately the vision that he demonstrated throughout his long career. We’re proud to give this award to the González family. Their passion toward customers and retailing is clearly evident as you walk through their stores,” Ling said. “Northgate González Markets is a great company and the best is yet to come.”

In accepting the 2014 Ben Schwartz Award, Northgate González Markets co-president Oscar González expressed his appreciation. “On behalf of my family, I want to thank you for honoring us tonight. This is a very special award for us. Ben has been a mentor to the family.”

In addition to the award that was presented to Northgate González Markets, a duplicate is on permanent display in the lobby of Unified’s headquarters building in Commerce, Calif. A plaque recognizing Northgate González Markets as the 2014 winner has been added to the permanent award.

A native of Joliet, Illinois, Bob Hermanns passed away on Feb. 10, in Long Beach, Calif.

A true food industry legend, Bob spent over 50 years in the food industry and for the past five years as Director of Food Industry Management Programs at the University of Southern California Marshall School of Business.

Bob, graduated from the USC Food Industry Management Program in 1967 and served the food industry in leadership roles with Jewel Food Stores in Chicago; Red Owl in Minneapolis; Lucky Stores in both Northern and Southern California; American Stores in Salt Lake City; Shopeaze, Inc. in Santa Clara; Weis Markets in Central Pennsylvania; Associated Grocers in Seattle; Encore & Associates in San Ramon and Park City Group in Park City, Utah. Bob Served on the Board of Directors of the WAFC during his years with Lucky Stores and Associated Grocers.

Bob is survived by his wife of 40 years, Carolyn, daughter and granddaughter, Stefanie & Sofia Stamires, and son Robert J. “Jeremy” Hermanns and daughter-in-law, Erika.

Plans are underway for a memorial service and the family is establishing a foundation to accept donations in lieu of flowers.

Those wishing to send condolences to Carolyn and family may do so at:
Carolyn Hermanns
4217 Cedar Avenue
Long Beach, CA 90807

Disposable plastic bags would be banned from grocery checkout stands in California and consumers would pay at least a dime for a paper or a sturdier, reusable plastic bag a under a compromise proposal negotiated by key legislators.

An attempt to pass a bill banning the bags failed last year amid opposition from plastic bag manufacturers and concerns that the move would eliminate jobs.

Senate Bill 270 seeks to temper some plastic industry opposition by providing $2 million from state recycling funds.

Plastic bag makers would be able to apply for grants to retrain their workers or re-engineer their operations to make reusable plastic bags that meet new criteria spelled out in the bill. Despite the sweetener, at least two major plastic bag makers said they will not support the new bill.

The legislation is a joint effort by Sen. Alex Padilla – the Los Angeles Democrat who authored last year’s failed attempt – and two of his colleagues who killed that bill, Sen. Kevin de León, D-Los Angeles, and Sen. Ricardo Lara, D-Bell Gardens.

De León and Lara have plastic bag factories in their districts and said last year that Padilla’s SB 405 would have hurt their working-class constituents. But they took heat for their votes from environmentalists who say too many plastic bags litter California streets, foul its beaches and harm wildlife.

“We need to find a way to balance the health of the planet with the preservation of people’s livelihoods,” de León said. “This new bill, I believe, is a strong compromise.”

Padilla, De León and Lara engaged in intense conversations on the Senate floor this week. They plan to introduce their proposal today alongside labor and environmental leaders at the Command Packaging plant in Vernon, a bag maker whose owner is supporting the bill.

Under the proposal, only plastic bags that meet certain thresholds for containing recycled content and being strong enough for more than 125 uses would be available for sale in California. They would have to contain at least 20 percent recycled plastic, a bar that would go up over time to 40 percent, said Mark Murray, executive director of Californians Against Waste.

“We’re trying to develop a criteria for an evolving marketplace,” he said.

Consumers would pay a minimum 10-cent fee for every shopping bag, whether paper or plastic, though Murray said plastic bags that meet the new criteria likely will cost more than that.

He said 90 cities in California already ban plastic grocery bags and require a 10-cent fee for paper. The bill would let existing city regulations remain in place.

“What’s happening in those communities is that we’re seeing a reduction in paper bags,” Murray said. “The 10-cent charge is causing people not just to switch from plastic to paper, but to bring their own bags.”

Grocery stores support the idea of charging for bags; those who make them, however, have a problem with it. Charging the bag fee amounts to a giveaway to the grocery stores, which currently absorb the cost of bagging customers’ purchases, said Catherine Browne, manager of Crown Poly, a bag maker in Huntington Park.

“The money is going to the grocers – it’s going to the grocers on the back of the consumers,” Browne said.

She said she hopes to see changes to the bill that would take the money collected from the bag fees away from the store owners and instead direct it to a “public purpose.”

The bill will face stiff opposition from the nation’s largest plastic bag maker, Hilex Poly, which has contributed more than $115,000 to California politicians since 2011.

“If this bill were to pass, it would be devastating to the 2,000 workers who are participating in the manufacturing of recyclable plastic bags in California,” said Mark Daniels, a senior vice president at Hilex Poly and chairman of an industry association.

He said $2 million is far too little to help manufacturers change their product.

“A $2 million fund to retrain or retool a factory is not at all realistic,” Daniels said.

Padilla said he expects Daniels’ plastic bag association to put up a fight. But he said the changes sweeping across California cities and counties will help build support for a statewide measure.

“I think that it’s a huge help that since last year, literally dozens more cities have adopted ordinances at the local level, either to implement phase-outs of their own or to support the state policy,” Padilla said.

Despite the many local bag bans in California, Daniels said no state in the nation has passed a statewide ban on plastic bags.

“We have had discussions in Washington and Oregon, and both those statehouses have rejected them,” Daniels said.

In other states, he said, “these things don’t even get out of committee.”

De León countered that California is a leader in environmental policy and that the bill isn’t meant to suit the needs of Hilex Poly, which is based in South Carolina.

“We worked tirelessly to make sure that those California – and that’s the key word here – manufacturing facilities will have resources,” he said.

The requirements in the bill would take effect at large grocery stores in July 2015 and at pharmacies and liquor stores in July 2016.

Reprinted from The Sacramento Bee (1/24/2014)

The Press Democrat

With council votes this week, Santa Rosa and Rohnert Park join a growing list of California cities that outlaw plastic carryout bags.

About 100 cities and counties, with a combined population of more than 12 million people, have enacted bag laws. Still more are on the way.

The direction is unmistakable — single-use bags are going the way of leaded fuel and other products that pose environmental hazards or needlessly clog landfills.

Plastic bags do both.

Californians use about 14 billion of them every year, but fewer than 5 percent get recycled. Most bags get tossed in the rubbish or become litter. Plastic bags account for 2 percent of the waste stream and $25 million a year in collection and disposal costs, according to a legislative analysis. Discarded bags are a major source of the plastic polluting the world’s oceans.

From Arcata to Solana Beach, local governments have concluded that the best solution is banning plastic carryout bags.

With this week’s votes, all nine Sonoma County city councils and the Board of Supervisors have enacted ordinances. By Sept. 1, single-use plastic bags will disappear from local supermarkets, convenience stores and many other retailers.

Similar rules already are in effect in Fort Bragg, Ukiah and unincorporated Mendocino County.

But a patchwork of local rules — a possibility locally with Santa Rosa opting out of a countywide approach — is confusing for consumers and a nuisance for retailers. This is a statewide issue, and it ought to be addressed as such.

Bag bills failed in 2010 and 2012. Of the three bills introduced last year, one reached the state Senate floor, where it fell two votes short — with four senators abstaining.

The author, state Sen. Alex Padilla of Los Angeles, says he’ll try again this year. His biggest obstacle may be fellow Democrats worried that a ban would cost jobs in Los Angeles-area bag factories.

That’s probably true, but the numbers peddled by industry lobbyists are overblown. Consider an independent estimate prepared for the Los Angeles City Council before it voted to ban plastic carryout bags. Net job loss in the city: 15. L.A.’s annual expenditure for picking up plastic bags: $2 million.
There are arguments against banning bags. They are convenient, and many are reused as wastebasket liners or to clean up pet waste. Produce bags, restaurant bags and other carryout bags exempted from these laws remain a litter problem.

The primary alternative — reusable bags — can harbor bacteria. Academic researchers found an increase in E. coli infections in San Francisco after carryout bags were banned, and epidemiologists in Oregon traced a norovirus outbreak to a dirty bag. Washing bags is a simple solution, but another study found that 97 percent of people never do.

These problems are comparatively minor and easy to solve. The costs and environmental hazards associated with plastic bags are well known and widely publicized, and recycling is easier than ever. Regrettably, too many people don’t bother.

That’s why cities and counties across the state are banning carryout bags. More nuisance than convenience, they should be banned statewide.

Reprinted from The Press Democrat (1/17/2014)

California Governor Jerry Brown released his 2014 on January 9.

Read the Proposal »

A recent survey by the University of Florida shows consumers rank food safety near the top of their list of concerns, with 85 percent of respondents calling it extremely or highly important, trailing only the economy and health care.

But perhaps more significantly, the survey also found a great deal of confusion — and downright misinformation — about the relative safety of different foods.

For example, the survey found that 72 percent of those polled thought that fresh fruit and vegetables were safe while only about 60 percent felt the same way about canned fruits and vegetables.

In fact, canned and frozen fruits and vegetables are much safer than unwashed raw produce, according to Doug Archer, associate dean for research for UF/IFAS.

“The number of outbreaks of foodborne illness attributable to fresh produce has grown substantially in the last two decades to the point where the Centers for Disease Control and Prevention, and the U.S. Food and Drug Administration have become very concerned,” Archer said.

Bacteria downgraded

The survey also found more Floridians naming growth hormones, additives and preservatives as health risks than bacteria, when in fact, it is bacteria that can fairly quickly cause major foodborne diseases.

“I think findings like this are telling us that, while there are some areas where there is correspondence between what consumers know and the actual facts, there are some significant gaps,” said Tracy Irani, director of the UF/IFAS Center for Public Issues Education, or PIE Center, which led the study.

The online survey, conducted in October, reached 510 Florida residents, all 18 or older. The responses were weighted to balance geographic, age, gender, race and ethnicity data to ensure the information was representative of Florida’s population.

The study found that Floridians are not as concerned about genetically modified food, with fewer than half saying they worried that it would harm the environment or cause health problems.

But 52 percent approve of using genetic modification to help fight citrus greening, a disease that threatens the state’s $9 billion citrus industry.

Currently the only genetically engineered crops are field corn, soybean, cotton, canola, sugar beet, papaya and squash.

Kevin Folta, interim chair of UF’s horticultural sciences department, said the survey shows the need for more education about the benefits of genetically engineered food.

“There has never been a single case of harm to an animal or human eating an estimated 3 trillion meals in the last 17 years, since genetically engineered food became available in the marketplace,” Folta said. “The survey says that we need to be doing more in communicating the science to the public.”

Reprinted from Consumer Affairs (1/8/2014)

If you’re bracing yourself for a major storm, you’ve likely already made your trip to the grocery store to stock up in case of emergency. But how do you ensure the safety of food in your refrigerator and freezer during a power outage or flood? Below are some tips from the USDA to keep your food safe and your family healthy during a weather emergency.

Preparation:

• Fill Ziplock bags, empty soda bottles, and other plastic containers with water and freeze. Use these to keep items in the freezer, refrigerator, and coolers cold.
• Freeze items in your refrigerator that you do not need immediately such as meat, poultry, milk, and leftovers such as chili and soup. If you loose power, this will buy you some more time by keeping them at a food-safe temperature longer.
• Group items together in the freezer and refrigerator to help keep everything cooler longer. Think “safety in numbers”!
• Have coolers at the ready to be filled with ice packs, frozen items, and refrigerated perishables.
  If you’re preparing for a flood, relocate foods on the bottom shelves of your pantry to higher shelves or cabinets.

If the power goes out:

• Keep refrigerator and freezer doors closed as much as possible.
• The refrigerator will keep food safe for about 4 hours, if it is kept closed. A unopened freezer that is packed full will hold its temperature for 48 hours. If it is only half full, it will keep food safe for 24 hours.
• If the food has visible ice crystals, it is safe to be refrozen or cooked to eat. The same holds true for food that has been kept in a sealed freezer for several days without power. If there are still ice crystals, it is safe.
• The safest way to determine a food’s safety is to use a thermometer. If a food’s temperature registers at 40°F or below, it is safe.
• After 4 hours without power, discard all refrigerated perishables such as meat, poultry, fish, milk, eggs, soft cheeses, etc. NEVER taste an item to see if it’s still good. As the USDA says, “When in doubt, throw it out!”
• Here’s a VERY HANDY chart of foods that are perishable and non-perishable

If your kitchen and pantry is flooded:

• Discard food that is not in a waterproof container and may have come into contact with flood water – this includes food or supplies in cardboard boxes, juice/ milk/baby formula boxes, as well as home canned goods. Anything with a screw-cap, snap lid, pull top, and crimped cap is also not waterproof.
• Canned goods with punctures, swelling, deep dents, or extensive rusting should also be discarded.
• More tips and complete cleaning instructions to sanitize waterproof food containers and kitchen cookware and utensils.

Good luck and stay safe!

Reprinted from Parade (1/2/2014)