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Published: 9/18/2010

Growers, union form allianceagainst Wal-Mart price policy

BLOOMBERG NEWS

Wal-Mart Stores Inc. is the target of an unlikely alliance between a labor union and farmers and ranchers who say the world's largest retailer is using its power to hold down prices in the agriculture industry.

The United Food and Commercial Workers International Union, which has tried unsuccessfully to unionize Wal-Mart's employees, is urging the Obama Administration to broaden its anti-trust inquiry into the meat, dairy, and seed businesses to include the retailer.

Wal-Mart's defenders say its policies benefit consumers, ensuring them low prices.

The UFCW's viewpoint is echoed by such groups as the 190,000-member National Farmers Union.

Until recently, farmers and ranchers mostly directed their ire at meat producers such as Tyson Foods Inc. and Smithfield Foods Inc.

Now some are saying Wal-Mart, whose motto is “Save money. Live better,” is unfairly cutting food costs at their expense.

“We've got to really join forces if we're going to win against this abusive market power,” Mike Callicrate, a rancher near Colorado Springs, said.

Wal-Mart's critics said they anticipate, after years of government reluctance to regulate farming, that President Obama will inject more competition into the food-producing business.

Lorenzo Lopez, a spokesman for Bentonville, Ark.-based Wal-Mart, said the company's goal is to streamline its supply chain for customers' benefit by working with, not undercutting, farmers.

“We look at ways to develop efficiencies so we can offer affordable choices by building strong relationships” with local farmers and growers, he said.

Wal-Mart's detractors argue that the retailer's power is so great that it can underpay for goods, threatening suppliers. In the past, anti-trust officials haven't considered Wal-Mart's actions a problem, said Andrew Gavil, a law professor at Howard University in Washington.

“So much has been written about Wal-Mart and whether there is anything that they do in pressing for lower prices that is an anti-trust violation,” Mr. Gavil said. “So far, the answer is no.”

Although the administration hasn't decided how it will proceed, there are no plans now to single out Wal-Mart, Agriculture Secretary Tom Vilsack said last month.

The Justice Department is still listening to comments and isn't going to “prejudge” what it should do, agency spokesman Alisa Finelli said.

Some rancher activists said proposed U.S. Department of Agriculture rules that would put limits on meatpackers signal the administration's intent to rein in agricultural companies.

The proposed regulations, which are opposed by the food industry, would bar meatpackers from buying animals from one another and restrict the companies' exclusive contracts with large livestock suppliers.

In 29 U.S. markets, Wal-Mart controls more than half of the grocery market, according to a September report by the UFCW, which represents 1.3 million food-processing and retail workers.

In some states, the retailer has more than 30 percent of the market in every major region, the union said. Mr. Lopez, the Wal-Mart spokesman, said the company didn't participate in the research and declined to disclose its own market-share figures.

Dave Warner, a spokesman for the National Pork Producers Council, a trade group, said the retailer is a victim of a campaign by a union trying to recruit its employees.

Wal-Mart's opponents want “equal outcomes, not equal opportunities,” he said.

Fred Stokes, executive director of the Organization for Competitive Markets, based in Lincoln, Neb., said his group favors more government action to stop anti-competitive efforts in the food industry. He said farmers are looking for a fair marketplace.



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