WaveStrength Market Trends for November 10, 2006
Not Over By A Long Shot
by Ann Sosnowski
Ever since the 20th outbreak of E. coli ravished the country’s spinach population in September, there’s been talk about how the FDA can increase safety regulations on vegetables and fruit.
Of course, over the years, the FDA never really imposed any “regulations” on food growers and producers, only a set of “guidelines.”
But now, supermarkets are taking the situation into their own hands and demanding change.
A group of owners from Vons, Albertsons, Ralphs and even Costco Wholesale Corp. (COST:NASDAQ) are giving growers only six weeks to establish new safety rules due to the recent spinach contamination. The group of heavy hitters wants growers to work with federal regulators and scientists on food safety standardization.
As I’ve told Hot Sheet readers, out of the 20 outbreaks of E. coli in the United States since 1995, half have originated from California, just as the most recent spinach outbreak did.
It’s obvious why the superstores are so antsy about getting higher safety regulations out of the door and into the field… the companies are losing millions of dollars in revenue every time a food package is recalled.
According to Tim York, president of Markon Cooperative, a California buyer for food distribution, if the growers do not come to a food safety standardization checklist or process in the next six weeks, food buyers will impose their own system on the industry, which could hurt the non-compliant growers.
The Western Growers Association, that represents farmers in California and Arizona, is working to create uniform farming standards in California specifically.
This conflict between food growers, producers, supermarkets, and the FDA is not over by a long shot, even if the recent spinach contamination is.
And that’s good news for Hot Sheet readers…
See, I’ve already uncovered the specific company that is due to profit from increased food safety regulations. It’s been around since 1982, and currently has countless contracts to test pathogens like E. coli and Salmonella in animals, vegetables, fruits, water, land… you name it.
I anticipate a good gain on this company in the coming months.
So Hot Sheet readers who got in on the pick… you’re ahead of the curve.