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The Food Marketing Institute (FMI) has gone to the US Supreme Court, requesting that Associate Justice Neil Gorsuch reverse a ruling by the 8th Circuit Court of Appeals that would have resulted in the release of government data showing how much taxpayer money is paid to supermarkets participating in the the Supplemental Nutrition Assistance Program (SNAP).

The Sioux Falls Argus Leader reports that the Appeals Court had ruled in favor of a release of the data after a lawsuit by the Argus Leader under the Freedom of Information Act. The court said that the sales figures were public information, but FMI argued that the release would make public proprietary competitive in formation that could hurt its members.

The Argus Leader writes that it “sued the United States Department of Agriculture, which administers SNAP, in 2011 after the government refused to turn over the sales figures under a Freedom of Information Act request.

“In January 2017, USDA abandoned the case after losing a bench trial in U.S. Federal District Court in South Dakota. FMI intervened in the case, and appealed to the 8th Circuit. In May, the 8th Circuit ruled that release of the annual sales figures would not cause competitive harm to the retailers who voluntarily participate in a program financed by taxpayers.

“Last year, taxpayers paid $68 billion to finance SNAP, formerly known as food stamps. The program is the primary food safety net for the nation’s poor, including children and the elderly.”
KC's View:
To be honest, I just didn’t understand the ferocity of the FMI position, and why this was worth going all the way to the Supreme Court. It seemed to me that the numbers ought to be made public in the interest of transparency. I didn’t get it.

So, I reached out to Jennifer Hatcher, FMI’s chief public policy officer, to try to get some perspective on the case … and I offer to you our email exchange in the hope that it offers some clarification.

MNB: How does knowing how much business a store or chain does in food stamp business reveal how much total business a store or chain does? (We’re not talking percentages, right? Or departmental breakdowns? Isn’t it just a dollar figure?)

FMI: Our members are very protective of their store level data, particularly for those companies not publicly traded. Aggregated data is already available and public. Companies are very concerned that if specific store level information for that particular store was released, it could be targeted by a competitor – particularly one not in the market now and all of their years of market analysis work would be negated overnight.

MNB: It always has been my experience that most retailers know pretty accurately what competitive stores are doing in terms of business - they get the info from wholesalers, brokers, suppliers, etc… Is this really telling them something they don’t already know?

FMI: As you know, our members who are privately held hold their market analysis information very closely and believe there is a difference between knowing general trends and knowing the exact sales and demographics of a single store location.

MNB: Doesn’t the FMI argument depend on a belief that it is more important to protect businesses than it is for taxpayers to know how their money is being spent?

FMI: There is a host of SNAP information already currently publicly available to taxpayers on the website.

First, the amount of SNAP dollars redeemed is public, by month and by state and county and you can compare one year to the next or one year to 5 years. We follow all of that for business and customer trends. And it is very helpful.

Also the types of stores with licenses and redemptions by category is also available and where SNAP authorized stores are located is also available on the web site. When we started engaging on this issue 10 years ago, we suggested that we would be much more comfortable disclosing aggregated store sales data. Therefore, rather than disclosing specific store-level data to tell competitors exactly how many SNAP dollars were spent in your store last month, the public would be able to know how much is redeemed by month, which stores are authorized, how much is redeemed by category of store. USDA publishes the category expenditures now and they also publish a list of the bad actors who have committed violations or fraud.

Fair competition is good and comes in all sizes, types, formats, (brick and mortar, online, down the street and international), but unfair competition that discloses information on only one side can drive local players out of the market and do real damage.