Big Grocer Pulls Unilever Items Over Pricing

The Wall Street Journal - A big grocery chain has removed from its Belgian stores about 300 Unilever products that it says are priced too high, a sign of mounting tension between retailers and suppliers as the recession grinds on.

The move by Brussels-based Delhaize SA, which operates the Food Lion chain and other grocery stores in the U.S., comes just days after Unilever reported strong fourth-quarter profit that was driven in large part by its ability to command big price increases despite the ailing economy.

The banished products include everything from Dove soap and Axe deodorant to a jam brand called Effi. Delhaize normally stocks as many as 500 Unilever products in its 775 stores in Belgium.

The stare-down shows how fraught relations between retailers and their suppliers are becoming amid the severe slump in consumer spending. Grocery stores across the globe are putting growing pressure on food and drink companies to lower prices or to offer other more favorable terms.

Faced with penny-pinching consumers and the growing strength of discount stores, retailers are desperate to cut prices, and a growing number are asking suppliers to help foot the bill.

Meanwhile, consumer-goods companies such as Unilever are struggling with a drop in demand from stores whose customers are trading down to cheaper private-label brands. Earlier this month, Kraft Foods Inc. lowered its earnings guidance for the year as retailers, including Wal-Mart Stores Inc., cut back orders.http://online.wsj.com/article/SB123430797027570341.html?mg=com-wsj

Three Death Sentences in Chinese Milk Scandal

The New York Times - BEIJING — A group of high-ranking dairy company executives and middlemen were sentenced by a Chinese court on Thursday to long jail terms, life in prison and, for three individuals, the death penalty for endangering public safety last year by selling and producing tainted milk products, according to the state-run news media.

The court said members of the group had intentionally produced and sold fake or substandard dairy products laced with a toxic chemical called melamine, which the government says sickened about 300,000 children and caused the death of at least six in one of the worst food safety scandals in China in decades.

The harshest sentences were given to Zhang Yujun, a dairy middleman who the government called one of the “principal criminals” in the scandal. He was sentenced to death after being convicted of selling 600 tons of melamine-tainted “protein powder” to dairy companies.http://www.nytimes.com/2009/01/23/world/asia/23milk.html?partner=permalink&exprod=permalink

Chinese Dairymen Spiked Milk, Eggs With Toxic Protein

The Wall Street Journal - ZHANGZHUANG, China -- Before melamine-laced milk killed and sickened Chinese babies and led to recalls around the world, the routine spiking of milk with illicit substances was an open secret in China's dairy regions, according to the accounts of farmers and others with knowledge of the industry.

Farmers here in Hebei province say in interviews that "protein powder" of often-uncertain origin has been employed for years as a cheap way to help the milk of undernourished cows fool dairy companies' quality checks. When the big companies caught on, some additive makers switched to toxic melamine -- which mimics protein in lab tests and can cause severe kidney damage -- to evade detection Worries about the extent of contamination in China's food supply took on new urgency this weekend.

After melamine was discovered in eggs in Hong Kong and mainland China, Beijing called for a nationwide crackdown to stop the contamination of animal feed, which authorities believe is the source of the melamine in eggs. The Agriculture Ministry said it has found melamine in 2.4% of the feed it has checked since mid-September, and has destroyed or confiscated more than 3,600 tons. The ministry called on local officials to "resolutely crush the dark dens" making and selling melamine for feed, saying it had found 238 and was investigating 278 more.

Melamine in feed hasn't led to the same kind of high concentrations of the chemical in eggs that were found when it was directly poured into milk -- thousands of parts per million in some cases. But amounts found in eggs have been above the safety standard China and several other countries established of 2.5 parts per million.

Egg sales are down, as is demand for chicken, and some farmers have begun slaughtering chickens they can no longer use. State media criticized food companies and government consumer-protection watchdogs for the lapses, as Beijing's response showed its alarm about a broadening threat to public confidence in food safety. Meanwhile, local officials in some areas were inspecting meat and considering widening the checks to farm-raised fish.
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http://blogs.wsj.com/chinajournal/2008/11/03/agriculture-officials-say-melamine-in-eggs-an-isolated-case/

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