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Organic fraud: Wal-Mart Stores Inc. accused of widespread distortion nonorganic food products misidentified as "organic"
by Mark A. Kastel
January 17, 2007

CORNUCOPIA, WI: When the staff at The Cornucopia Institute surveyed Wal-Mart stores around the country last September, analyzing the giant retailer’s pronouncement that they would begin selling a wide variety of organic food at just a 10% mark-up over similar conventional products, they were surprised to discover widespread problems with signage misrepresenting nonorganic food as "organic."

Now, Cornucopia, one of the country's most prominent organic watchdogs is even more surprised that more than four months after informing the company of the problems, which could be interpreted as consumer fraud, and two months after filing a formal legal complaint with the USDA, the federal agency regulating organic labeling, many of the deceptive signs at Wal-Mart stores are still in place.

"It is unconscionable that rather than correct these problems, Wal-Mart Stores Inc. instead responded to our concerns by attacking our comparatively modest public interest group in an effort to discredit our organization in the media,” said Mark Kastel, codirector of the Wisconsin-based Institute. "It is not as if a product recall or store remodeling would have been required to correct Wal-Mart's deceptive consumer practices. They could have simply sent out an e-mail to store managers and corrected the problem instantly."

New store inspections throughout Wisconsin have found that Wal-Mart stores are still selling nonorganic yogurt and sugar identified as organic, and designated organic produce sections continue displaying many nonorganic items, among other widespread abuses. The Cornucopia Institute again contacted the USDA about the ongoing problem but the agency could not confirm that any enforcement action was imminent on the federal level. Cornucopia then filed a consumer fraud complaint with the Wisconsin Department of Agriculture, Trade, and Consumer Protection on January 13.

"We were very impressed with the immediate and professional response we received from the Wisconsin regulators," stated Will Fantle, Cornucopia's research director. "Within hours officials from the state contacted us to confirm some of the information we submitted and we verified our past interactions with the USDA for them.”

The USDA's organic program has been widely criticized for, among other management problems, not attending to questions of improprieties in a timely manner. In one case a certifier decertified a Florida orange grower who could not document that the oranges and orange juice he was selling were produced organically. More than two years later, pending USDA action, the products were still on the market and being purchased by unsuspecting consumers.

“The vast majority of all organic farmers and food marketers operate with a high degree of organic integrity. These abuses, and the lack of responsible enforcement by the USDA, endangers the credibility of the organic label for all of us, said Tom Willey of T & D Willey Farms of Madera, California, an organic fresh market vegetable producer.

"Wal-Mart cannot be allowed to sell organic food ‘on the cheap’ because they lack the commitment to recruit qualified management or are unwilling to properly train their store personnel. This places ethical retailers, their suppliers, and organic farmers at a competitive disadvantage," Kastel said.

A number of other organic food retailers throughout the country, including Whole Foods Markets and many of the nation’s member-owned grocery cooperatives, have gone to the effort to become certified organic in terms of the handling of their products and have invested heavily in staff training to help them understand organic food production and merchandising concerns.

“Our management and our employees know what organic means,” said Lindy Bannister, general manager at The Wedge Cooperative in Minneapolis, Minnesota. “If Wal-Mart intends to get into organics, they can’t be allowed to misidentify ‘natural’ foods as organic to unsuspecting consumers.” The Wedge, the largest single store food cooperative in the nation, was one of the first retailers to go through the USDA organic certification process.

Cornucopia’s complaints ask the USDA and Wisconsin regulators to fully investigate the allegations of organic food misrepresentation. The farm policy organization has shared their evidence, including photographs and notes, from multiple stores in Wisconsin and in many other states, with the agency’s investigators. Fines of up to $10,000 per violation for proven incidents of organic food misrepresentation are provided for in federal organic regulations.

"The business practices at Wal-Mart are quite disturbing and certainly incompatible with the values that have transformed the organic food industry into a lucrative marketplace," said Ronnie Cummins, director of the Organic Consumers Association (www.organicconsumers.org). "We have called today for a boycott of Wal-Mart by organic shoppers until such time as the integrity of their merchandising and product line can be ascertained."

This past September, The Cornucopia Institute also accused Wal-Mart of cheapening the value of the organic label by sourcing products from industrial-scale factory-farms and Third World countries, such as China.

The Institute released a white paper, Wal-Mart Rolls Out Organic Products—Market Expansion or Market Delusion?, that concluded that Wal-Mart was poised to drive down the price of organic food in the marketplace by inventing a "new" organic—food from corporate agribusiness, factory-farms, and cheap imports of questionable quality (available at www.cornucopia.org).

"If unchecked, Wal-Mart's alleged misrepresentation of organic food, along with their procurement practices, and cheapening the meaning behind the organic label, could endanger the livelihoods of many farmers and family business owners who have labored to build organics into a lucrative $16 billion a year industry," Kastel lamented.

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NOTE: The Cornucopia Institute’s White Paper, Wal-Mart Rolls Out Organic Products: Market Expansion or Market Delusion?, along with a photo gallery containing images of some of the violations observed and of organic items now being offered for sale at Wal-Mart stores, can be found on the organization’s web page at www.cornucopia.org as can Cornucopia’s legal complaint filed with the USDA regarding Wal-Mart’s alleged organic product misrepresentation.

High-resolution files of these photographs and/or a head shot of Mr. Kastel are available electronically upon request.

The Cornucopia Institute is dedicated to the fight for economic justice for the family-scale farming community. Through research, advocacy and economic development our goal is to empower farmers both politically and through marketplace initiatives. The Organic Integrity Project acts as a corporate watchdog assuring that no compromises to the credibility of organic farming methods and the food it produces are made in the pursuit of profit.

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