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Home   About   Membership   Forums & Meetings   Government Affairs   Members Only September 18, 2015


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PRESIDENT'S MESSAGE

House/Senate negotiations on the fiscal year 2016 Defense Authorization Act

While both the Senate and House appropriations bills restored the Pentagon's $322 million cut in their respective bills, action continues on the fiscal year 2016 National Defense Authorization Act House and Senate conference. There are several major commissary issues that are being negotiated between the House and the Senate.

The House fully funded and endorsed the commissary benefit. However, the Senate bill cut commissaries $322 million and included legislative provision that would mandate privatization of at least five of the largest stores and other changes to law that would allow the DoD to pass operating costs on to patrons that have traditionally been paid by appropriations through higher prices.

As of now, there have been no announcements of resolution of the House and Senate differences and the conferees continue to negotiate over these and other issues including other pay and compensation matters.

ALA will issue a bulletin when negotiations are completed and the outcome of these negotiations will be a major subject of the upcoming ALA Annual Conference in Washington, D.C.


Pentagon commissary funding and patron pricing proposal circulating for fiscal year 2017

Meanwhile, Pentagon planners are already preparing for the fiscal year 2017 and beyond. Reports are that the current planning documents represent a major departure from the drastic proposals in the current year's proposal.

The fiscal year 2017 plan does not call for major reductions to the DeCA budget but instead forestalls any major cuts until 2019. Also, the documents state that the Pentagon will establish an Optimization Management Body that would oversee exchanges and commissaries. The current proposal also calls for authority to create a pilot program for "alternative pricing" that would represent a change from the current pricing formula for commissaries of cost plus a five percent surcharge. The proposal also allows for more operating expenses of commissaries to be derived from “improved management practices” and the alternative pricing program.

It would also provide for commissaries to be converted to nonappropriated fund activities to include converting current civil service commissary employees to nonappropriated fund paid civilians. All of these proposals would reduce commissary funding by nearly $1 billion over the five-year defense plan instead of the $4.5 billion that is currently proposed. The proposal would also establish a structure to facilitate and enhance the process of exploiting synergies between commissaries and exchanges.

This proposal will be a major subject of discussion at the ALA's Annual Conference to be held in Washington, D.C. in October.


Release of consultant study of commissary pricing, operations and resale structure

The fiscal year 2015 Defense Authorization Act called for a major review of commissary operations and pricing structure. This review was conducted by the Boston Consulting Group and was just recently completed. It will be briefed to the House Armed Services Committee on September 17. A copy of the report is provided with this bulletin. ALA has been circulating a paper addressing some of the findings of the study.

This report and ALA's response will l be a major subject of discussion at the upcoming ALA Annual Conference in Washington.


Possibility of a government shutdown

The table is set for another showdown on five issues that would result in a shutdown of the Government at the beginning of the next fiscal year that starts on October 1.

The last time the Government shutdown was in October of 2013. That shutdown lasted 17 days. Commissaries overseas remained open but commissary workers were furloughed on October 1 and did not report back to work for eight days. The rest of the Government remained closed until October 17, 2013. Exchanges were not affected because they do not rely on Federal funding for most of their operations.

Several of the factors that contributed to the last impasse are in play this year as well including differences between Republicans and Democrats on funding levels for domestic and defense programs under the Budget Control Act (commonly referred to as the sequester). Also in play this year are differences over several other policy and funding issues that include funding of the Highway Trust fund, re-authorization of the Export-Import Bank, funding for Planned Parenthood and the Iran nuclear deal. Republicans and Democrats are threatening to make these issues in the settlement of the overall funding of the Government.

We fully expect another year of brinksmanship as both the Republican led Congress and the White House face off over these issues. The Government most certainly won't be funded under "regular order" where funding is authorized and appropriated by October 1 for all agencies either under individual agency bills or a massive Government-wide funding bill. The more likely scenario is a "continuing resolution" that funds the Government for a short period of time while issues are (or are not) worked out. As of press time, Senate and White House leaders were getting ready to meet to work out some sort of deal. Working in favor of the Government staying open is the fact that the 2013 shutdown experience was so miserable for all sides that they don't want it to happen again.

During the 2013 shutdown, ALA intervened with Defense and Administration leaders to get the stores open prior to the rest of the Government re-opening, citing loss of product already in the pipeline and effect on patrons, especially in areas where there are limited grocery shopping alternatives. We are preparing to do the same in case the Government again comes to the brink and work with policy-makers to keep the stores open as "essential" services.

ALA will issue updates on the shutdown as they occur and if not resolved by the Annual Convention, this will be a major subject to be addressed in the October meeting in Washington, D.C.


Patrick B. Nixon
President, American Logistics Association




WASHINGTON UPDATE


The 6 issues that could cause a government shutdown
The Washington Post
Even if Congress beats the odds, and the government doesn't shut down come Oct. 1, Washington will probably still have undergone a lengthy, all-consuming debate about the issues that threaten to close its doors.
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With possible shutdown nearing, Obama looks to take budget fight to GOP
The New York Times (tiered subscription model)
Congress hurtled toward a government shutdown, with Republicans threatening to block a budget deal if it includes financing for Planned Parenthood, as President Barack Obama prepared to join the fight by pushing Republicans to scrap a multibillion dollar tax advantage for private equity managers.
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Week ahead: Defense negotiators search for deal
The Hill
Leaders of the House and Senate Armed Services committees are at a stalemate in the conference negotiations over a defense policy bill.
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Kendall: 'Full-year CR Would Be Devastating'
Defense News
Defense Department acquisition chief Frank Kendall said a yearlong continuing resolution to fund the government "would be a devastating thing" for the Pentagon, as he hoped for a bipartisan deal to fund defense at the president's requested levels.
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Budget fix would fall below spending caps for 2016
Military Times
The ongoing political fight over how to fully fund the defense budget could end up forcing the Pentagon's available funds even lower than the fiscal 2016 spending caps lawmakers wanted to avoid.
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ALA/MCS IMPACT WORKSHOP


ALA/MCX Impact Workshop — Oct. 29
ALA
We are excited to announce a new Workshop, dedicated exclusively to MCX!

On Thursday, October 29 — just after the ALA Convention — ALA and MCX will conduct the "first-ever" ALA/MCX Impact Workshop.

This event is intended specifically for ALA members who supply MCX, and designed to be a collaborative and interactive exchange of ideas. Key buyers and divisional managers from MCX will be attending and participating in an array of working and briefing sessions.

We all know the environment in the Military Resale Channel has changed. Keeping up to date on those changes is critical to your business success! Please see the preliminary agenda for more details and register for this must attend event today!

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MARK YOUR CALENDAR

Specific information on upcoming ALA events is posted regularly on the ALA website. To learn more about each event, please click the following links:

Date Event
Oct. 1 Hampton Roads ALA Golf and Oyster Roast Chuck Johnson Memorial
Oct. 26-28 68th Annual Convention
Oct. 29 2015 ALA/MCCS Impact Workshop
Dec. 3 NY ALA Holiday Luncheon


COALITION UPDATE


Military coalition honors legislative champions
The Military Coalition
The Military Coalition (TMC) — an influential consortium of military and veterans groups — presented its highest leadership awards to Sen. James Inhofe, R-Okla., Sen. Barbara Mikulski, D-Md., and Rep. Joe Heck, R-Nev., for their leadership in protecting the vital interests of service members, retirees, veterans, their families and survivors. Senator Inhofe and Senator Mikulski were instrumental in leading the fight against privatization of the commissary benefit. In addition, as Ranking Member of the Senate Appropriations Committee, Sen. Mikulski fought to protect the commissary against dramatic cuts and restored $322 million in funding for the program. As Chairman of the Armed Services Military Personnel Subcommittee, Rep. Heck led the fight to prevent a reduction in the commissary benefit and an increase in health care fees.
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Secretary of Defense remarks to the Air Force Association
U.S. Department of Defense
During the Air Force Association annual convention, Secretary Carter outlined the Air Force commitment to: the people of the current force, a national security strategy suited for the new century, and the force of the future. He also said, "Without a negotiated budget solution in which everyone comes together at last, we will again return to sequestration, reducing discretionary funds to their lowest real level in a decade — despite the fact that members of both parties agree this result will harm our national security. The alternative to a budget deal, a long-term continuing resolution, is merely sequester-level funding under another name. Much about the future is unclear, but not this: the self-inflicted damage from sequester, a long-term continuing resolution, and continued budget uncertainty would send the wrong message at the wrong time to the world."
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The budget showdown: How did we get here?
Brookings
Among the many items on the agenda for Congress and the White House this fall is how to fund many of the federal government's key programs — including defense, education, science research, and foreign aid — and whether a government shutdown can be averted in the process. There are many ways the two sides might resolve the issues at play but first, let's review how we got here.
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Pentagon should examine troop-relocation costs, McCain says
The Hill
The Pentagon may be wasting millions of dollars a year by not looking at ways to trim moving costs for troops and their families, says Sen. John McCain, R-Ariz. In a new report, the chairman of the Senate Armed Services Committee said the average cost of moving troops and their families to new assignments rose 30 percent over the past 13 years, despite a 12-percent decline in relocations. The Pentagon spends $4 billion per year on relocation. "That’s nearly 4 percent of the annual military personnel budget, which is already under intense pressure from skyrocketing costs associated with military pay and benefits," states the report.
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COMMISSARY ANNOUNCEMENTS

Commissary Web Posts

The following commissary items were posted to the ALA Website between 10 AM, September 10, 2015 and 10 AM, September 17, 2015:

PROMOTIONS:
- DP #21, Alaska Promotion Quantities.
- DP #22, Far East Promotion Quantities.
- DP #23, WW Promotion Package, Home for the Holidays Season Sale.
- 2016 DP #1, Shipper, Pallet, One-Time-Buy Items (Cover Letter).
- 2016 DP #2, Shipper, Pallet, One-Time-Buy Items Published Early.
- Fall Club Pack, CONUS November Quantities and Far East & Alaska Quantities and Update #3.
- Valentines, Far East & Alaska Quantities.
- Dry Grocery Seasonal Package, Update #2.
- Candy Seasonal Package, Update #2.
- Non-Food Seasonal Package, Update #2.

NOTICES TO TRADE (NTT)
- None Received.

MISCELLANEOUS:
- Adds/Changes/Deletes for Week 15-37.
- CRV Values as of September 13, 2015.
- Guard/Reserve CONUS On-Site Sale Schedule, September 10, 2015.
- ALA Commissary Council September 10, 2015 Meeting Slides.
- DeCA EBS Presentation slides presented to the Commissary Council on September 10, 2015.




COMMISSARY NEWS


Soldier receives free commissary groceries for a year
DVIDS
When Army Spc. Daquana Brown showed up at the Fort Lee, Virginia, Commissary on Sept. 11, she expected to pick up VIP passes to a NASCAR race she had won for the following night at the Richmond International Raceway. Maybe she even expected to pick up a few items at the store's customer appreciation case lot sales event.
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FDA finalizes FSMA preventive controls rules for human, animal foods
Food Safety News
Four-and-a-half years after the Food Safety Modernization Act was signed into law, the first two major rules have been finalized. On Aug. 31, U.S. Food and Drug Administration officials announced that they had submitted the final rules on preventive controls in human and animal food to the Federal Register as required by the court.
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A new day for Celestial Seasonings
Food Business News
Why did the Hain Celestial Group recently revive its 45-year-old tea brand? As the company's top executive explains it, "Millennials are big tea users, and I think they looked at Celestial (Seasonings) maybe as their father's Oldsmobile."
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Fixing what's wrong in cereal: General Mills, Kellogg discuss their plans
BakeryAndSnacks.com
The cereal market has been trending downward in recent years. At this year's Barclays Global Consumer Staples Conference, two of the country's biggest cereal companies, The Kellogg Company and General Mills, explained how they plan to recover in 2016 and beyond.
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Why ALDI is the grocery store of the future
ZACKS
In a time when the grocery shopping experience is undergoing a change, in audience, service and merchandising, a name in the food retail industry is making quite the footprint: ALDI.
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Perimeter of grocery stores no longer a safe haven
The Seattle Times
You've probably heard it so many times that you take it as gospel: for better nutrition, shop the perimeter of the grocery store. The rationale is twofold. One, that the ring around your grocery store is where the fresh food is found: meat, seafood, dairy and fruits and vegetables. Second, that the center aisles are filled with "junk" food and other processed foods that are high in salt, sugar and fat. Unfortunately, the idea that healthful and less-healthful food is segregated by geography is a fallacy on a few levels.
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Missed an issue of Executive Briefing? Click here to visit Executive Briefing archive page.


Category expansion continues for WhiteWave Foods
Food Business News
Facing increasing competition in the market for almond milk, particularly from private label, WhiteWave Foods has been focused on broadening its stable of plant-based food and beverage products. The introduction of Silk branded cashew milk and extending the Silk brand into plant-based yogurt are just two examples of how management is growing the company.
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fairlife: 'We're responsible for a large portion of growth in value-added dairy category'
BeverageDaily.com
Coca-Cola-backed high-protein milk brand fairlife isn't sharing any numbers, yet. But if you're wondering how it's performing, the answer is very nicely, says communications director Anders Porter, who says the firm is also working on a suite of products utilizing the milk "that can be consumed during any day part."
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Wal-Mart to expand grocery pickup service
The Wall Street Journal (tiered subscription model)
Wal-Mart Stores Inc. is expanding its grocery-pickup services to several dozen locations, as it tests shoppers' desire to get their groceries without leaving their cars.
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EXCHANGE NEWS


Tobacco: A clear and present danger to the military
The Virginian-Pilot
At least 108 million people, military and civilian, were killed in wars in the 20th century. The World Health Organization estimates that nearly as many people — 100 million — were killed as a result of tobacco use. If current trends continue, the organization predicts that as many as 1 billion will die this century from using tobacco.
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AAFES layaways resume
Fort Leavenworth Lamp
The Army and Air Force Exchange Service is bringing back fee-free layaway, just in time for early holiday shopping. The layaway program ensures military shoppers have plenty of time to pay for gifts while keeping them hidden from prying eyes.
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Navy nudging sailors toward a healthier lifestyle
Military.com
Burger days have been a staple of the Navy as long as the Navy has been around, sailors say. "There are certain things that the Navy doesn't want to let go of, like burger days," said Lt. Jonathan Bradshaw, food service officer, while sitting in the Cross Hall Galley at Naval Submarine Base. While the juicy food option likely isn't going away, the Navy is trying to nudge sailors to put down the hamburger for a healthier option.
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INDUSTRY NEWS


Wal-Mart sparks battle with suppliers over margin-squeezing fees
MSN
After years of meeting demands for ever cheaper prices, many Wal-Mart Stores Inc. suppliers are saying no to new margin-squeezing storage fees and a payment schedule that could delay for months how quickly some are paid.
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Kmart expands layaway program to encourage holiday shopping
Reuters via Las Vegas Review-Journal
Kmart has expanded its layaway program and dropped a required down payment on a lease-to-own plan, joining other U.S. retailers in trying to get a jump start on grabbing holiday shoppers.
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J.C. Penney is testing its first fast fashion brand
Fortune
The department store started piloting its own private label brand, "Belle + Sky," a line of trendy women's wear it can produce and turn over more quickly, with a view to better competing with the H&Ms, Zaras and Forever 21s of the world — retailers that have stolen away customers from department stores and other clothing chains.
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At Barnes & Noble, chief is new, but earnings woes are old
The New York Times (tiered subscription model)
It was only Ronald Boire's second day on the job as Barnes & Noble's new chief executive, and a rough initiation awaited him as the company posted disappointing results for its most recent quarter.
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Do you want to shop where they analyze your eye movements?
By Peter Moloney
A new startup can analyze eye movements as customers browse in a store. Based on that, it triggers email offers to their mobile phones in real time. Wow. I hope that company lists customers on their website so I know where not to shop. Email promotions that personalize offers based on the interests of each individual customer will increase response rates. OK, but how do you know what offers will be most interesting to each customer? That's not so easy.
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How technology is trying to bring some sanity to the holiday shopping rush
Bloomberg Business
You won't have to worry about holiday shopping for at least another couple of months, but for freight operators and many of the world's largest retailers, preparation for the year-end shopping craze has already begun. To meet that demand, cargo ships begin crowding in October to transport inventory from factories to warehouses around the globe.
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Everything you need to know from Apple's massive event
TechCrunch
Apple just dropped a ton of new hardware, including new iPhones, iPads and a brand new Apple TV. There were a lot of goodies snuck into the recent event at the Bill Graham Civic Auditorium in San Francisco. Here's a recap of everything Apple unveiled that you need to know about.
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Home decorating retailer At Home files for IPO
The Associated Press via Business Insider
At Home Group, a chain of stores that sells furniture, rugs and other home goods, said recently that it plans to become a publicly-traded company.
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Retail sales in US rise as consumers unshaken by turmoil
Bloomberg Business
Retail sales in the U.S. climbed for a second straight month, a sign consumers may be looking past recent volatility in financial markets. The 0.2 percent increase in August followed a 0.7 percent gain in July that was larger than previously reported, Commerce Department figures showed. The median forecast of 84 economists surveyed by Bloomberg called for a 0.3 percent advance.
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TRENDING ARTICLES
Missed last week's issue? See which articles your colleagues read most.

    Poll: Washington insiders expect full-year CR (Defense News)
Top 10 food and beverage industry trends — and why they matter (Food DIVE)
US military commissary food price hike? Produce in Pacific could be more expensive under new rules (International Business Times)
Advantage Sales & Marketing acquires Marlin Network (CSP)
Boehner's future as speaker in doubt (POLITICO)

Don't be left behind. Click here to see what else you missed.


C-STORE NEWS


J&J Snack Foods takes on breakfast
CSP
J&J Snack Foods Corp. has entered the frozen breakfast category with its Mary B's Buttermilk Biscuit Melts.
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Hard Rock Energy makes 7-Eleven debut
CSP
A reformulated Hard Rock Energy Drink will make a splash in retail by debuting in 650 7-Eleven convenience stores in Texas.
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Industry views: Will 2014's profits be short-lived?
CSP
President of Meyer & Associates Dick Meyer writes: After 38 years in C-stores, I was surprised (and pleased) when my good friend Mitch Morrison invited me to author one more, preferably "bold" article on my industry views. To help me select a succinct thesis, I looked at John Roscoe's "18th Annual (and final) Dollars Per Day Survey" published in 1988. Roscoe was, in my opinion and those of many other veterans, the original and boldest soothsayer of the industry, including accurately predicting the names of seven chains he saw as headed down the toilet — and saying as much on the cover of his last report.
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Slideshow: Wawa: Inside an upgraded icon
CSP
Wawa convenience stores announced in February that it would remodel its entire store base to introduce new products and improve efficiencies. The Wawa, Pennsylvania-based chain granted CSP exclusive access to the "whys" behind the three-year Wawa Remodel Program, what will and won't change in the upgraded stores and a sneak peek into what we can expect from the retailer moving forward.
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MWR NEWS


Backlogged child care program burdens Army families
Military Times
The Army's child care fee subsidy program is in such disarray that many families are experiencing financial hardship — some forced to deal with collection agencies for unpaid bills from child care providers, some filing bankruptcy and some spouses being forced to quit their jobs or stop their education, according to a new report.
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Day care subsidy backlog leaves Army parents without reimbursement
Styrk
An Army program designed to help with day care expenses has instead pushed some troops toward bankruptcy and exposed the personal information of thousands more, according to a House oversight hearing. The Army Fee Assistance program subsidizes child care for about 9,000 families forced to find private providers due to long waitlists on bases. But over the last nine months, it has amassed a backlog of about 26,000 unpaid invoices, unresolved subsidy actions and unanswered emails and voicemails, an auditor told the House Oversight and Government Reform Committee.
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Garrison honorees give more than 5 centuries of service
The Redstone Rocket
The 19 guests of honor had a combined 515 years of government service. They gathered for the Garrison's length of service recognition ceremony at The Summit. Garrison Commander Col. Bill Marks presented the individual award certificates and lapel pins. "This is the best installation on the planet because of what you guys do every day," he said.
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