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Show F6 The Salt Lake Tribune BUSINESSSunday, May28, 1995 2 Food Giants Seek Repeal of Sugar Subsidies no Ono By Y' )URNAL THE WALL For two giant food companies, sugar prices are a stickyissue Kraft Foods Inc. and Nabisco Holdings Corp. are lobbying hard to repeal price sup- ports on sugar, which help U.S. farmers but make products from Jell-O to Oreo cookies costlier. The companies helped sponsor a recent ad in Roll Call, a newspaper aimedat members of Congress, calling the government’s sugar program “unworkable.” Meanwhile, their corporate parents — Philip Morris Cos. and RJR Nabisco Holdings Corp. — sit on the opposite side of the fence when it comes to another farm commodity: tobacco. Their cigarette units back price supports for tobacco even though that stance means they must pay the growers more. In return, however, the companies have won vi- tal political support: Legislators from tobac co-growing states are among the cigarette companies’ main supporters in Congress. Sugarfarmershaveseizedon this perceived double standardto bolster their own lobbying campaign to retain price supports, which are part of a five-year farmbill up for renewal this year Sandy Stitt, who owns an 800-acre sugar- cane farm in Clewiston, Fla., was thefirst to drawpublic attention to the corporate inconsistency. The 52-year-old farmer recently berated Philip Morris chief executive officer. 2offrey Bible, at a congressional field hearn Florida. “Mr. Bible is quite a study ed Ms. Stitt, addressing some 400 attend- Hisfooddivision, Kraft, leads the charge time to try to repeal the sugar program, which hasexisted in its current form since 1981. The Republican-dominated Congress, fixated on budget cuts, is expected to scrutinize the pro: ainst sugar while he comes on bended knee pleading for tobacco. gram, which limits imports and keepsthe do- Robert Buker, vice president of U.S. Sugar Corp., a Florida cane producer calls the two food companies ‘hypocritical’ and sa: will support a farm program if they and theywill attack another if they don’t.” Philip Morris declines to respond, while RJR officials dismiss the flap as small potatoes. “I don’t think we spend 10 seconds wor- markets. The policy costs manufacturers and rying about it,” says a company spokesman. Thecontroversyis another example of how the volatile polities of tobacco are spilling over to unrelated businesses. Indeed, some angry Philip Morris shareholders have long demanded that the companyspin off the Kraft food unit, which it acquired in 1988, so that the food company won't be tainted by the esca- lating legal and regulatoryattacks against tobaceo. Undersimilar pressure, RJR in January sold 19.5 percent of Nabisco in an initial public offering Earlier this month, Kimberly-Clark Corp., the maker of Kleenex and Huggies diapers, yielded to shareholder criticism and announcedit would spin off its cigarette-paper andreconstituted-tobacco operations. For Kraft and Nabisco, it’s an auspicious consumersabout $1.4 billion a year, according to the General Accounting Office. Kraft and Nabisco’s lobbying effort against the sugar program has been joined by dozens of other food companies, including Hershey Foods Corp., Mars Inc. and Kellogg Co. Arrayed against them arethe nation’s estimated 68,800 sugar growers and refiners, who produceanestimated $4 billion of sugar annually. They contendtheloss of price supports would raise the world market price of sugar by decreasing doméstic production andforcing U.S. companies to import more sugar. Neither Kraft nor Nabisco will comment on their lobbying effort; nor will they say how much sugar they buy. But for Kraft, the nation’s biggest food company with annual North American sales of $17 billion, sugar is a crucial ingredient in everything from KoolAid and Cool Whipto Post cereals and Entenmann’s cakes and cookies. Sugaralso is abundant in scores of Nabisco’s products, including Life Savers candy, Chips Ahoy! cookies and even SnackWell’s Fat-Free Double Fudge Cookie Cakes. Nabisco’s U.S. sales reached But there are pockets where such laws remain In Michigan, there is a statute that prohibits dealerships in counties with populations of more than 25,000 from opening on Sunday, says Barry McGuire, spokes- Continued from F-1 spread move toward Sunday openings among Utah automobile dealers. “T cannot imagine Larry manfor the Michigan Automobile K Miller, for example, suddenlydeciding to open on Sunday,” he says. Sunday opening is something that automobile dealers have beendealing with individually for years, says Ted Orme, spokesman for the National Automobile Dealers Association in McLean, Va. Dealers Association. “The statute was challenged and our Supreme Court upheld it,” McGuire says. Andin someparts of Michigan, it gets even worse for consumers. McGuire says a 5-year Federal Trade Commission investigation that concluded last year found some Detroit dealers weregetting “We have always been accused together to set their hours of op- of being a pretty Godless lot,’ Ormejoked. “Butinreality, there are probably as many dealerships closed as open on Sunday.” Ormesays few of the blue laws eration. Hesays the agreement with the FTC resulted in dealers agreeing to limit their hours of operation each week. “As a result, many dealers there do not open on Saturdayeither.” requiring retailers to close on Sundayremain on the books. 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