Wayne Pesce

Action Alert: EBT Skimming Incidents Raise Concerns For Grocers

0

Earlier this month the Connecticut Department of Social Services (DSS) raised alarm as reports emerged of a surge in electronic benefit transfer (EBT) skimming schemes affecting some of the state’s most vulnerable citizens.  A sudden influx of over 100 clients visited DSS field offices in one day to report fraudulent EBT transactions underscoring the magnitude of this situation. The unlawful conduct was predominantly concentrated in Bridgeport, with spikes also noted in Danbury, Torrington, and New Haven.  Initial investigations suggest that SNAP benefits are being unlawfully obtained within Connecticut and then utilized or sold out-of-state, notably in areas such as NY and TX.

These fraudulent debit transactions in Connecticut mirror similar criminal activity reported elsewhere in New England and throughout the country. During this past December holiday season, the Boston Globe documented a wave of credit card skimming incidents affecting numerous food stores in the Boston metro area.  In January, Germantown, Wisconsin police announced the discovery of a skimming device at a Sendik’s Food Market near Milwaukee. Additionally, Giant Eagle confirmed the presence of skimmers at a store in Powell, Ohio. Following an extensive internal investigation, additional devices were uncovered at four other Giant Eagle stores in Ohio.

In response to these developments, we are urging all food merchants to stay vigilant and proactive as this ubiquitous organized theft tactic proliferates. Grocers are being strongly encouraged to conduct regular checks on their card readers, carefully examining them for any irregularities that may indicate the presence of skimming devices. If such a device is discovered, immediate action should be taken to shut down the affected register and notify authorities. In addition to notifying local law enforcement, we recommend that any infringed party inform Connecticut DSS so they can coordinate with federal partners specializing in EBT retail theft investigations.

Furthermore, we are communicating with every individual retail member to quantify our industry’s best practices while encouraging the adoption of routine security measures, such as regularly changing PINs, especially around the issuance of SNAP benefits.  In collaboration with Connecticut’s DSS, the Connecticut Food Association will be distributing an informational poster to remind our retail members and their associates about the importance of regular PIN changes to safeguard customer benefits.  A deliberate approach not only safeguards retailers but also protects the welfare of their customers.

As food retailers navigate these challenges, communication, and vigilance within the industry are paramount. By staying informed and being resolute, we can mitigate the growing risk posed by card-skimming criminals and, uphold the integrity of our operations and services. And with a bit of good luck, catch a few bad actors along the way!

 

STATEHOUSE UPDATE

Climate Change Brings Flooding Damage To Connecticut, Affecting Local Retailers, Farmers

In recent years, climate change has emerged as an increasingly urgent concern, and its far-reaching effects have been felt across the globe. While discussions often center on extreme weather events, rising sea levels, and temperature fluctuations, it’s essential to recognize the profound impact of climate change on local communities, particularly in the realm of agriculture. Connecticut, known for its picturesque landscapes and agricultural traditions, has not been immune to these shifts. Our state recently experienced the devastating consequences of climate change, with July flooding along the Connecticut River causing significant damage. However, the effects have rippled through the farming and retail sectors in the state, leaving local retailers and farmers grappling with unprecedented challenges.

The Connecticut River Floods: A Story Of Devastation

In July, the Connecticut River bore witness to some of the most severe flooding in recent memory. The repercussions of this natural disaster were extensive, resulting in widespread damage, with farms taking a substantial hit. The swollen rivers and streams inundated fields, destroying crops and jeopardizing the livelihoods of local farmers.

Reports compiled by the Connecticut Department of Agriculture painted a grim picture. Producers across the state estimated losses exceeding 1,500 acres, representing a catastrophic blow to the agricultural landscape. Beyond the loss of crops, the economic toll was staggering, with nearly $21 million in sales revenue disappearing due to the unyielding fury of the flooding.

Untimely Frost In May: A Double Blow To Agriculture

However, the story doesn’t end there. The state’s farmers faced a double whammy with an untimely frost in May, which added to their woes. The frost wreaked havoc, causing losses estimated at $8.45 million. The impact extended to 1,077 acres of crops, encompassing apples, peaches, grapes, blueberries, strawberries, Christmas trees and even honeybee queens. The sudden cold snap disrupted crop growth and flowering, further reducing the yield and profitability of these vital agricultural products.

The Ripple Effect On Food Retailers

The reverberations of these climate-induced disasters extended well beyond the farm gates. Local retailers that rely on a steady supply of fresh produce found themselves facing supply chain disruptions and rising costs. As farmers struggled to recuperate from their losses, it became increasingly challenging for retailers to source the products they needed to stock their shelves. The resultant scarcity of local produce had consumers feeling the pinch in their pockets and further highlighted the vulnerability of the local retail sector.

The Resilience Of Farmers And Retailers

Despite these formidable challenges, Connecticut’s farmers and retailers have demonstrated an inspiring degree of resilience. Many farmers are exploring innovative strategies to adapt to a changing climate, such as investing in improved irrigation systems and experimenting with more resilient crop varieties. Local retailers are diversifying their supply sources and exploring partnerships with farmers to ensure a more stable and consistent product flow.

Looking Ahead

The recent climatic events in Connecticut serve as a stark reminder of the pervasive and profound impact of climate change on local communities. It is clear that both local retailers and farmers are not only at the forefront of experiencing these challenges but also are crucial stakeholders in implementing solutions.

Addressing climate change and its impacts necessitates collaborative efforts, both at the state and community levels. It is imperative to support initiatives that bolster the resilience of local farmers, retailers and communities, while also advocating for broader measures to mitigate the effects of climate change. Climate adaptation strategies and robust disaster management plans are essential to safeguard the economic stability and well-being of the state’s residents.

In the face of these challenges, the resilience and determination of local farmers and retailers offer hope. Their ability to adapt, innovate, and work together not only strengthens the agricultural sector but also underscores the importance of local communities uniting to combat climate change. Together, we can face this global challenge head-on, ensuring a more secure and sustainable future for all.

 

STATEHOUSE UPDATE

Connecticut is one of only eight states in the country denying responsible adults the convenience of buying wine where they shop for food, requiring them instead to make a second trip to a package store. It is time to end the Prohibition Era quirk in Connecticut law preventing grocery stores from selling wine.

The law is so out of step with the times that, as of January, it is now possible to buy recreational marijuana at several locations in Connecticut, but you still cannot buy a bottle of cabernet at a grocery store. Clearly, the current law grants package stores a monopoly at the expense of the hundreds of thousands of consumers who shop in food stores weekly and who want the opportunity to purchase a bottle of wine while doing so.

The issue of grocery store wine sales has been debated for decades in the Connecticut legislature, and the most successful argument against the concept is legislators’ concern that allowing grocery stores to sell wine will hurt small local package stores. Experience and extensive research prove this is simply not the case.

There was once a time when beer could not be sold in Connecticut grocery stores. There was once a time when you could not buy any alcohol on Sundays. Despite vehement objections from the package store industry, both of those prohibitions were lifted, and neither has negatively impacted the life of any local package stores. In fact, in both cases, general sales of alcohol increased, bringing more tax revenue to the state of Connecticut. Moreover, the number of Connecticut package stores has increased, not decreased, since Sunday alcohol sales were legalized in May of 2012.

A recent study by the Zwick Center for Food and Resource Policy at the University of Connecticut shows the following: consumers favor grocery store wine sales as a matter of convenience and don’t believe they would shop less at package stores if they had the option to buy wine in a grocery store. The Zwick Center study further concludes that allowing grocery store wine sales would increase sales tax revenue to the state by almost $2 million per year over the next 20 years and twice that in the following decades.

According to the same study, this proposed change would cause minimal disruption in the market while allowing drinking age adults in our state a preferred option. There is no evidence to back up the claim that expanding the availability of wine to grocery stores would put package stores out of business.

Allowing wine sales in grocery stores does not necessarily mean every grocery store will sell wine, nor does it mean shopping patterns will change dramatically. Not every grocery store will choose to sell wine. Some retailers, like Target and Walmart, will continue to be prohibited from selling alcohol of any kind because their inventory consists of less than 50 percent food. Additionally, grocery stores are unlikely to stock large varieties of wines because wine will be offered as a matter of convenience, not as a matter of specialty. Consumers looking for specific brands or seeking a specific experience will continue to seek out expert advice and wider variety at package stores with the inventory space and staff knowledge to offer expert guidance.

Leaders at the state capitol have pledged this year to make Connecticut a more business-friendly state, to offer ideas and legislation designed to grow and expand the economy. One step in the right direction would be making this small change to our state law that is rooted in a by-gone era and that unfairly protects one group of retailers at the expense of others—and, most importantly, at the expense of consumers.

Research shows that if this issue were put directly to the voters, wine sales in grocery stores would win with 80% of the vote. In other words: a landslide.

STATEHOUSE UPDATE

Connecticut remains one of only a handful of states that prohibit wine sales in food stores. There is plenty of evidence in neighboring states that suggests allowing the sale of wine in grocery stores will have little to no negative impact on Connecticut businesses. In fact, allowing the sale of wine in grocery stores is likely to yield significant benefits to Connecticut consumers and the state’s economy. Expanding wine sales to local grocery stores creates jobs, protects farmland, inspires the production of more locally-sourced wines and creates no disruption to the states three tier wine & spirits distribution model.

Selling Wine In Grocery Stores Creates Jobs and Revenue

Allowing the sale of wine in Connecticut’s food stores will create an estimated:

1,018 new jobs
Representing $47.5 million in wages

$23.9 million
Additional state revenue in the first year

$21.9 million
Additional state revenue in subsequent years

Total Economic Impact Including new wages, wine sales (and tax revenue generated)
$189.6 Million

* Stonebridge Research 2011 Group study

Acknowledging that wine sales by grocery retailers will have some negligible impact to smaller package store owners, we agree that it is important to have a plan to protect those small businesses. Providing solutions that allow package stores to maintain current profitability by expanding their portfolio of eligible consumer products levels the playing field for them. Highly consumable items such as salty snacks, various cheeses, chocolates, and gift baskets give consumers the option to purchase additional items when shopping for their beer, wine, and liquor and recover lost wine sales.
Increasing wine sales promotes local wine producers and protects farmland
Allowing wine sales in grocery stores will ultimately lead to an increase in the volume of grapes and fruits grown in Connecticut, allowing for the growth of wine production by local wineries and vineyards. This will create more jobs in the agriculture sector, protect farmland by incentivizing the growth of higher value crops, and inspire new growers. Local products are a true competitive advantage for Connecticut’s grocers and CFA retail members would welcome an opportunity to showcase “local” wine, agriculture and tourism in their stores.

Three Tier System

Grocery store wine sales do not negatively impact spirits distributors; in fact, Connecticut’s distributors stand to benefit from increased wine sales. Furthermore, distributors also benefit from the decreased cost to serve (CTS), as grocery retailers are generally more efficient than package stores. Increased sales at a lower cost to serve is a winning formula for any business.
This debate boils down to convenience and leveling the playing field for who is eligible to sell wine at retail. Allowing traditional grocery stores to sell wine, returns wine to its appropriate and traditional role as part of a meal, encouraging healthy consumption, at the same time increasing consumer choice and convenience. The time is ripe to allow the sale of wine in CT grocery stores