business news in context, analysis with attitude

We got a number of emails about the line in one story noting that US government officials were awaiting an invitation from the Chinese government so they could inspect plants from which melamine-contaminated wheat gluten was shipped. MNB user Dan Onishuk wrote:

The fact that our food inspectors are not allowed to visit foreign plants invited or unannounced needs to be addressed by this administration. The FD and USDA need to enforce a strict policy on plant inspections either overseas or in the US on all imported ingestible commodities in the event a situation that just arose can be addressed effectively-failure to comply results in restricting shipments immediately. This should be enough to institute better quality control at US plants that process food goods with foreign ingredients/additives. The cost should be shared by both entities, the exporter and importer and not the taxpayer. What a wake up call it would be if the FDA/USDA required additional label information to include source of ingredients in the process of the item.

Another MNB user wrote:

Did I miss something? The FDA has to wait for "invitations" to inspect the plants? Albeit pet food in this example, but this is our food supply folks! I'm sure that there are plants in China manufacturing ingredients that go into our "human food" as well and if something happens with that, the US manufacturer has to wait for an "invitation" to check on what's going into Americans' food????? Maybe I'm missing something but this seems like insanity to me!

We probably have to wait for an invitation because we would expect the Chinese to wait for the same sort of invitation from us if the positions were reversed.

MNB user Bob Vereen had a thought about what he sees as an inconsistency:

With all the heat Wal-Mart is taking on many fronts, how come it is the only retailer (that we know about) which has collection boxes for plastic bags in its stores, to encourage recycling?

As we tell our kids, life isn’t fair.

Wal-Mart doesn’t take heat on the plastic bag issue, nor on its many environmental initiatives. It just takes heat on other issues where it is more vulnerable.

Sounds about right to us.

Regarding the acquisition of Scott’s by Kroger, one MNB user recalled:

Sorry to see them go. I used to do work for Scotts about 20 years ago and they were king of Ft. Wayne. They ruled the Ft. Wayne supermarket business. Then Meijer came to town but they still held on strong while weaker competitors left. Then they got the one-two punch. Supervalu bought them and they no longer were the hometown chain. Instead of being run locally they were now operated by an out-of state sterile corporation that didn't really have a track record of successful retailing outside of Minneapolis. Then of course Wal-Mart Supercenters opened in nearly all of their markets and just clobbered them. Sales were basically cut in half from their peak in the 90s.

We had a piece on Friday about analysts laying out various road maps for a Wal-Mart revitalization and commented:

The question that Wal-Mart needs to answer – and perhaps it already has, since it hasn’t done any of these things – is whether such moves would have a short-term impact but hurt the company long-term. We are reminded of the Biblical passage: “For what does it profit a man to gain the whole world, and forfeit his soul?(Mark 8:36)

One MNB user responded:

Your quote from Mark 8:36 reminded me of an early lesson my father taught me. He said "God designed man for eternity, not businesses. We have it all backwards. We think people come and go, but the company lasts forever. The opposite is true." This was evidenced in his life in that he spent his career working for a company (Hughes Aircraft) and now receives his retirement check from a former competitor.

Another MNB user observed:

It seems everyone wants Wal-Mart to do this or that in order for the stock price to go up. Wal-Mart is still basically controlled by family members and unless they want the stock price to go up, then it probably isn't going anywhere. They have so much money they couldn't possibly spend it or give it away in their lifetimes. So do they really care if the stock goes up? Financial planners are always telling me I should do this or that with my money in order to make more money. My colleagues tell me I should raise my prices and my income will go up. But I don't care. I enjoy doing as I please and I think Wal-Mart is the same way. Most of the complainers are outsiders who are just tired of seeing the stock go nowhere. Why did they buy it in first place? My guess is they are just idiots who were going along with the crowd because Wal-Mart is just another big company on the stock exchange and that's all they needed to know. As far as I'm concerned Wal-Mart stock is about as exciting as buying stock in the local electric utility. These analysts need to wake up and realize that owning Wal-Mart stock is not an investment, it’s a novelty. Kind of like buying stock in a hockey team. Don't expect it to go up. Just own it for fun. A professional sports team should be focused on winning games and not impressing the odds makers in Las Vegas. Same for Wal-Mart. They need to focus on running a retail chain and not trying to impress stock analysts. When Wal-Mart starts dancing for Wall Street, that's when they will really be in trouble.

That ship may have sailed. Which explains the various crises in which the company has become embroiled.

MNB user Bob Anderson, prompted by our note about the passing of Helen Walton, the widow of Wal-Mart founder Sam Walton, wrote:

Helen Walton, as her husband Mr. Sam, will truly be missed. She always cared about the associates and would always have them over to her home for lunch at shareholder time. Her love of community and education will live on through the Walton Art Center and the University of Arkansas. We all thank her for her generosity and big heart. She will always be the First Lady of Wal-Mart, God Bless her. Today I hope all will take a minute out of their day an pay their respect to a real classy Lady.
KC's View: