There is finally action and movement on Capitol Hill to rein in credit card swipe fees! Senate Majority Whip Dick Durbin (D-IL) called on the CEOs of VISA and Mastercard to testify early this month before the Senate Judiciary Committee where the committee debated the Credit Card Competition Act that I have previously commented upon in my commentary. The eventual goal of the legislation before Congress is to inject free market competition into the credit card market to rein in high credit card so-called “swipe fees” that are currently paid by merchants on every credit card transaction.
The measure is being highly debated on the Hill and lobbyists can be seen daily in the Senate chambers representing banks and financial institutions as well as retail organizations. The measure has bipartisan support. Expect to see heavy lobbying on both sides plus paid political ads appearing in the print and electronic news media. We will report on the hearings next month as they were scheduled to be held at press time.
An interesting sidebar note: Visa and Mastercard credit card swipe fees set a record high of $100.8 billion in 2023, which is $7.5 billion more than in 2022. Also, the Federal Reserve Board extended the comment period on its debit card swipe fee proposal that I have previously commented on until May 12. Their proposal would lower the amount banks can charge for debit swipe fees from 21 cents to 14.4 cents per transaction.
And, just days before press time, Visa and Mastercard and large credit-card issuing banks agreed to a settlement with merchants that have been suing them over the fees charged. In that new agreement, the credit-card networks and financial institutions will lower the fees that merchants pay to accept credit cards. However, the National Association of Convenience Stores (NACS) commented by saying that the settlement provides only modest relief while failing to meaningfully address the core issue of allegedly fixing swipe fees with financial institutions. So, stay tuned as there are lots of moving parts in play.
Funding FDA And USDA
By now you know that Congress passed the stop-gap minibus (which funds a slew of federal programs and departments through the end of fiscal year 2024) to preclude a government shutdown that includes funding for the Agriculture Department and the Food and Drug Administration (FDA) through September. The measure included an additional $1 billion for the Special Supplemental Nutrition Program for Women, Infants, and Children (SNAP).
Maryland Congressman Andy Harris (R-MD) failed in his attempt to restrict the type of foods users of SNAP can purchase as part of his “SNAP-Choice” initiative. Anti-hunger organizations and food retailers had heavily lobbied against the proposed SNAP Choice proposal.
Bottom line: USDA and FDA were funded at about $26.2 billion (about $81 per person in the US) under the final USDA-FDA funding agreement, which is about the same as prior levels. SNAP got funded at $119 billion which House Democrats said was sufficient to provide for full program participation.
Organic Traceability
Last month saw the implementation of the new USDA “Strengthening Organic Enforcement” (SOE) rule overseeing organics. What the new SOE rule requires is more recordkeeping, audits and traceability of organic certifications throughout the food supply chain. However, most grocery stores, but not all, are exempt from the SOE rule.
Those food retailers exempt include those that do not process organic products; operations with organic sales totaling $5,000 or less annually; retailers that process organic products at the point of final sale, like restaurants and stores that prepare food on site; handlers of products with less than 70 percent organic ingredients; storage operations with sealed packaging and wholesalers with sealed retail-packaged products. If you are in doubt, check with your legal staff.
The goal of SOE is to enhance oversight and enforcement of the production, handling and sale of organic products and to also prevent fraud.
A Bill Going Nowhere
In my prior commentary, I mentioned that President Biden was on the warpath toward telling food retailers to cut back on unfair pricing practices. Well, a handful of senators has rallied to his call by introducing a new bill last month aimed at cracking down on what the president labeled “shrinkflation.” That term means when manufacturers reduce the amount of product in a package but maintain the price to increase profits.
Senator Bob Casey (D- PA), a supporter of the bill, said that he and a few of his peers want to target the practice through the Federal Trade Commission to direct the agency to develop regulations that classify shrinkflation as an unfair or deceptive practice. Republicans are saying the bill lacks merit.
With Democrats holding a very slim majority in the Senate, it is unlikely that this bill, in our opinion, will go anywhere. But again, the issue of food prices makes for good quotes on the upcoming campaign trail so be aware. Also, the president made unfair pricing practices a part of his recent State of the Union address.
WIC Is 50 Years Old
This year marks the 50th anniversary of the Special Supplemental Nutrition Program for Woman Infants, and Children (WIC). WIC ensures that millions of mothers, babies, and young children have the specialized nutrition, resources, and referrals to health and social services they need. WIC should be an integral part of every grocer’s store operation. Questions about WIC may be directed to USDA’s Food and Nutrition Service at 800.439.1420.
Meat Organizations Come Together
The North American Meat Institute (NAMI), the Canadian Meat Council (CMC), and Consejo Mexicano de la Carne (COMEARNE) have signed a memorandum of understanding (MOU) aimed to strengthen coordination and collaboration in the meat industry between the counties.
According to Meatingplace News, the MOU formalized the organization’s commitment to enhancing trade, reducing regulatory barriers and exchanging information within North America. A press statement said that “the organizations expressed their commitment to deepening partnerships on various industry-related issues” and that they planned to reconvene this summer to reassess priorities and review programs on their joint initiatives.
Stand Up To Big Ag
In a semi-related matter, U.S. Senators Jon Tester (D-MT) and Chuck Grassley (R- IA) have issued a formal letter to their Senate colleagues calling for renewed support of meat industry regulations. Targeting “big ag consolidation….efforts to weaken the Packers and Stockyards Act in the upcoming FY 2024 Agriculture Appropriations bill,” the letter urges the Senate to “hold multi-national food manufacturers accountable.”
For their part, Tester and Grassley have introduced a bill to create an “Office of the Special Investigator for Competition Matters” to target and prevent anti-competitive practices in the meat industry.
Food Allergy Breakthrough
Remember when lactose pills came on the market to provide relief to those who have difficulties with digesting dairy products? It was reported last month that a widely used drug treating chronic severe asthma also significantly reduced reactions to many common food allergens. Marketed under the brand name Xolair, the drug is the first preventive treatment that protects users from accidental life-threatening exposures, according to an item I noted in the news publication 1440 Daily Digest.
Roughly 19 million people (about the population of New York) in the U.S. (including more than 5 million children) have food allergies, resulting in about 3,000 emergency room visits annually. The new drug, meant to be injected on a regular basis and not taken after a reaction begins, has already been approved for use in those older than the age of one by FDA health officials.
FDA’s New Directory Of Dietary Supplements
Last month the FDA updated the agency’s official Ingredient Directory of Dietary Supplements, including renaming the FDA web page to be identified as “Information on Select Dietary Supplement Ingredients and Other Substances.” These changes are the result of some constructive stakeholder feedback received since the FDA initially published the directory several years ago.
In addition to the new directory title, the directory updates include adding categories to classify the type of FDA action or communications for each listed ingredient; recording the date each listed ingredient was added to the directory; and streamlining the introductory text on the page. All this activity has come about because of the significant increase in sales of dietary supplement products. These days we are bombarded with dietary supplement ads in the electronic and print media so the new directory should be a useful tool for food and pharmacy retailers.