By Roxana Tiron - 08/08/10 01:03 PM EDT
A small Massachusetts business is angling for congressional support to keep
selling its shrimp to the U.S. military.
Alder Foods, a woman-owned company from Walpole, Mass., has enlisted Sen. John Kerry (D-Mass.) and Rep. Stephen Lynch (D-Mass.) in an effort to change a Pentagon rule that could end the company’s business — worth $12 million per year — with the military.
Kerry and Lynch have already written to Clifford Stanley, the Pentagon’s undersecretary for personnel and readiness, asking him to make the exception. The lawmakers wrote that they were “deeply troubled” that the small business in their state will be “significantly” harmed.
Alder’s top seller to the military is its Rainbow Shrimp, company president Michelle Keating said. Rainbow Shrimp is considered a private label, but Keating says her seafood has established itself as a leading brand in military stores.
Congress passed the commercial sales statute so that troops
and their families can have access to nationally recognized food brands in
Alder Foods finds itself in a bind: its entire business model is based on selling to the military commissaries. Keating said the company does not plan to make the investments that would be necessary to put its seafood on commercial shelves.
Keating noted that companies have to pay slotting fees to store and display their products on supermarket shelves. That costs between $80,000 and $100,000 for a single product, according to Keating. Alder sells 12 products to the military, and a retailer would have to pick up all those items to comply with the statute, Keating said.
Alder has been selling seafood to the military for the last 25 years. Because of its long-standing record with the military, the company “understood” that it was no longer considered a private label and that despite the statute the company would be grandfathered into the system, Keating said.
The company did not encounter any problems over the more-than 13 years since the statute took effect until this May, when another company tried to sell its seafood products to the commissaries but was denied because of the law.
The company that was denied — Mazzetta of Highland Park, Ill. — pointed out to the government that several other companies, including Alder, were in violation of the 1996 law, and also should not be able to distribute to the military, Keating said.
Mazzetta’s spokesman could not be reached for comment.
Keating said that more than 400 companies are going to be affected by this turn of events, but that the majority of them would be able to package their foods and sell in retail stores.
Keating said that the products her company distributes already compete for the military’s taste buds with products sold by three other shrimp companies that are also sold in retail.
Keating took over the company from her father, who founded it in the basement of his house 45 years ago. Keating is deeply involved in charitable giving for the military: her company donated more than $100,000 to support Fisher House, an organization which provides free or low-cost lodging to veterans and military families receiving treatment at military medical centers.
As the chairwoman for the Fisher House Boston, Keating helped raise $3 million to build the home for families of wounded soldiers being treated at the VA Medical Center in West Roxbury, Mass.