<i>CSNews</i> Regional Report

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<i>CSNews</i> Regional Report

By Hank Behar - 08/22/2006
In Utah, retailers are waiting for details from the state on a new training program for store personnel who sell alcoholic products, while Montana retailers are struggling with a new state law that requires them to label their meat products as to country of origin, an almost impossible task. In the meantime, Oregon, New Mexico, Colorado and Wyoming, are facing -- and fighting -- mandates on ethanol and bio-diesel fuels.

In Utah, where the minimum drinking age is 21, the drive is on by the Highway Safety office to eliminate alcohol sales to youth, so what could be more natural than dubbing it the E.A.S.Y. program? But there's more to it than just a clever acronym, since 40 percent of those who start drinking before the age of 15 become alcohol dependent, and in Utah the average age a person takes that first drink is 12.3 years old. Binge drinking, which is four to five drinks at a single sitting, often starts in middle school.

E.A.S.Y.'s goal is to limit accessibility to beer and other alcohol products by teenagers. It requires all convenience and grocery store employees and supervisors who sell beer to complete an alcohol training seminar that will equip them with an understanding of the effects of alcohol on teenagers. Store personnel who complete the seminar must wear a badge that will enable law enforcement personnel to readily identify them during compliance checks. The ruling went into effect July 1 of this year.

John Hill, executive director of the Utah Petroleum Marketers and Retailers Association (UPMRA), supports the law, but is waiting for the details. "We fully understand the need for such a program, and we're ready to comply, however the state hasn't told us what the training program consists of so we're in the dark," he said.

One of the positive aspects of the law, noted Hill, is that it standardizes penalties for non-compliance. "Without the law every community could levy its own set of penalties consistent and unfair. With the new law, there are warnings, fines and suspensions for infractions, which are more equitable. Now, we just need the details on the training program."

On October 1, retailers in Montana they will find themselves caught between the hammer of the state and the anvil of the feds, as a new state law goes into effect requiring retailers to place placards in their meat cases identifying the country of origin of every meat product on sale.

"Not only is it impossible for the retailer to comply with this law," said McKee Anderson, executive director of the Montana Food Distributors Association, "but the law itself is in defiance of the USDA, which is a federal agency. The state wants it one way and the federal government wants it another, and the Montana retailer is caught in the middle.

"Besides that," declared Anderson, "it's impossible for the retailer to know the origin of at least 96 percent of the meat products he sells; there's too much that comes in from out of state. But we haven't heard a word from the USDA, so the law is marching steadily toward its debut October 1."

In the meantime, the governor has come out in favor of the law, declaring that "If you know where your shirt comes from, you ought to know where your steak comes from, too."

What will Montana's retailers do?

"We're going to put in placards that say Country of Origin Unknown on 96 percent of our products and see what happens," said Anderson. "That's the only thing we can do."

And, as if Montana retailers aren't facing enough challenges, Wal-Mart is coming to town. "Wal-Mart is building the largest refrigerated warehouse, distribution center in the world in Cheyenne," noted Anderson," with at least five new retail locations scheduled to open in Montana in 2007. The result will be new regional shopping centers, and in a sparsely populated state like ours, there won't be many customers left for our outlying retailers."

Opposition to Wal-Mart is mounting, said Anderson, but certain factions, such as Chambers of Commerce, are in favor of Wal-Mart's arrival since they see increased business ahead -- so the next step will be to formulate an anti-Wal-Mart plan of action. "There's still time," observes Anderson, "but not much."

In Oregon, Steve O'Toole, executive director of the Oregon Petroleum Association, notes that the introduction of ethanol and bio-diesel into the marketplace has gone very smoothly, reinforcing his opposition to mandates set by law. "In the past," noted O'Toole, "mandates have done nothing but cause artificial shortages and raise prices. They don't work. But the state legislature may consider mandates when it meets in January, so if it does, we will oppose them.

O'Toole is in favor of alternative fuels and likes bio-diesel, but has some reservations about ethanol. "I'm not as crazy about it as some people are," he declares. "Ethanol reduces gas mileage," he said, "and while it may be a renewable source of energy, there's no agreement on how much energy it takes to produce. We may be spending more energy than we're getting back for each gallon of ethanol made, and that's not my idea of marketplace efficiency."

In New Mexico, the ethanol and bio-diesel mandating issue is also on the front burner. Ruben Baca, state executive of the New Mexico Petroleum Association takes essentially the same position as his counterpart in Oregon. "I'm against mandating in any form simply because we don’t have the capacity to fill the need," declared Baca. "If the legislature mandates us to carry ethanol and bio-diesel products, the result will be an immediate rise in prices driven by shortages -- as if prices weren't high enough already."

Baca can make his opinions felt since he's a member of a task force designated by the state legislature to come up with a proposal by October 1 on how to approach the alternative fuel issue in New Mexico. With him on the committee are representatives from refineries, oil producers and the retail community, as well as automotive engineers. Thus far, he feels confident the committee will forego mandating and instead, will propose legislation that offers tax breaks and other incentives to encourage investment in alternative fuel production facilities in New Mexico.

That won't alter his basic position on ethanol, however. "As far as I'm concerned," said Baca, "ethanol promises more than it can deliver. It gets fewer miles to the gallon and reduces power. I wouldn't count on it to help much."

Besides the intractable problem of not having enough diesel fuel to go around (with harvest time coming up, to boot), the petroleum marketers of Colorado and Wyoming are facing a legislative session in January that may have two items on its agenda opposed by the Colorado/Wyoming Petroleum Marketers Association (CWPMA): mandated ethanol and bio-diesel usage, and anti-price gouging legislation in the form of limited price increases, both of which Roy Turner, executive vice president of CWPMA, has vowed to fight.

"Even though we have over three months to go before the session starts, it's never too early to think about these things," said Turner. "We have to be ready to take action."

One of the actions Turner favors is letting legislators know just who the petroleum marketers of Colorado and Wyoming are. "We're not refineries or oil drillers," Turner said. "Many of us are second and third generation owners in family businesses, who aren't responsible for the high prices. And we're not cashing in on them. So price gouging laws that limit price increases to say 10 percent based on the previous 30 days' prices don't make sense. Retailers could get caught in the middle and actually lose money on gas sales. We've got to educate legislators about that.

"And mandating of alternative fuels just doesn't work," he noted. "You can't artificially build a market. The governor vetoed mandates on ethanol and price gouging laws last year, but we hope to stop those proposals before they even get to his desk."