Amidst allegations of rampant, deliberate overcharging stemming from mislabeling on prepared foods products, Whole Foods Market took to the offensive against New York’s Department of Consumer Affairs (DCA), claiming that the bureau's inspectors “have not provided evidence to back up their demands nor have they requested any additional information from us, but instead have taken this to the media to coerce us."
First reported in the New York Daily News, the Department’s claims drew regional (and ultimately national) attention after commissioner Julia Menin suggested that investigators within her department had potentially uncovered food labels featuring “the worst case of mislabeling they have seen in their careers."
In documents made available to the public following its initial investigation, the DCA allegedly tested 80 different package types and found they all featured mislabeled weights, adding that 89 percent of the tested packages were incongruous with federal statutes for the maximum amount "that an individual package can deviate from the actual weight." Commissioner Menin continued, “"the overcharges were especially prevalent in packages that had been labeled with exactly the same weight when it would be practically impossible for all of the packages to weigh the same amount. These products included nuts and other snack products (flavored almonds, pecan panko and corn nuts), berries, vegetables, and seafood."
It remains unclear what effect the discovery may have had on consumer confidence in the company, as Whole Foods Markets’ stock continued to trade at $40.35/share in the days following the announcement (a fairly negligible drop of 0.86% in value entering the week). NBC’s widely-popular financial analyst Jim Cramer, of “Mad Money,” recently argued that the company’s largest basis for steady revenue was their prepared foods department, which provided restaurant-grade food at grocery-store prices. It would stand to reason that the latest allegations would undermine the very bedrock of that revenue stream.
Falsely labeling a prepared-foods package in New York State carries an initial fine of up to $950 with supplemental fines as high as $1,700 for each additional infraction. Given the volume of charges against them, Whole Foods Market could be facing a significant payout to New York State.
The Food and Drug Administration provides universal guidelines as to the methodology of scaling and advertising food weights, to wit: “Only the quantity of food in the container or package is stated in the net quantity statement. Do not include the weight of the container, or wrappers and packing materials. To determine the net weight, subtract the average weight of the empty container, lid and any wrappers and packing materials from the average weight of the container when filled with food.”
Fair and proper measuring of foods sold to consumers is of immense importance. In violating the FDA’s standards for presentation of food labels, food manufacturers and retailers fail to uphold their end of a vital relationship in the United States: that between consumers and commerce.
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Last modified on Thursday, 02 July 2015 16:08