Oser Communications Group

GOURMET NEWS JUNE 2015 www.gourmetnews.com GENERAL NEWS 8 5 Hard-to-Insure Risks for Grocery Retailers Olive Oil Supply Continued from PAGE 1 agrees with this non-committal stance, even while acknowledging the growing blight caused by OQDS. "We feel the au- thorities have to further investigate the bac- teria and its effects that are a cause for concern," said Pier Paolo Celeste, Italian Trade Commissioner and Executive Direc- tor for the NY offices in the US, "It is not entirely proven yet." The ITC believes that the Xylella fas- tidiosa bacterium – the cause for OQDS – may not be what is making the olive trees sick. Instead, they believe that it is only a component that must be activated by right conditions to harm the trees, leaving the olive fruit still safe for consumption. "We know for sure that the quality of the fruit is intact," Celeste said, "It attacks the tree itself, but does not affect the quality of the olive oil produced. It is absolutely safe." Some Italian non-government organiza- tions, such as Peacelink, are pushing to save the trees infected by OQDS. The or- ganization has requested the European Food Safety Authority (EFSA), an inde- pendent organization that advises the Eu- ropean Union, to confirm that the bacterium is not the cause of olive tree death. Peacelink points to trees that have survived and rebounded after the orchards have been treated, but hasn't been able to provide enough proof to be sure. The EFSA is saying that X. fastidiosa is a new problem for Italian olive trees and doesn't seem to need specific conditions in order to spread, so there's no concrete plan that is sure to succeed that will stop the spread. Since X. fastidiosa has such as wide range of hosts, it can persist even with in- secticide treatments on specific host crops – such as olive trees. On top of that, there is no record of success- ful eradication of X. fastidiosa once it finds a home outdoors. The destruction of olive trees that have been infected is one of the only ways to contain the spread of the blight, an action the Italian government is reluctant to approve and Peacelink outright opposes. Despite their qualms, the Italian govern- ment has already culled an estimated 700,000 olive trees, with some reports in- dicating the number closer to 1 million or more. Some of these trees were between 150 and 200 years old. The acreage that was culled was imme- diately replanted with new precautions in place to prevent further spread. This new crop of olive trees is hoped to be back in production in about three to four years. "We are actively seeking out viable solu- tions," Celeste said, "It is something that is being vigorously studied by our authorities; as it represents a unique challenge." The production will certainly not be back to normal in 2015. Neither will prices. The Italian Trade Commission Office confirms that 2014's limited production did affect prices. A recent report by the Inter- national Olive Council (IOC), an inde- pendent organization that reports on the olive industry annually, stated that Italian production actually declined 55 percent and prices climbed by as much as 37 per- cent from 2013. The IOC is currently pro- jecting that Italy's 2015 olive oil production will be larger than 2014's, but still signifi- cantly below normal. GN Grocery retailers traditionally face a multi- tude of risks that are not covered by typical insurance programs, according to a new white paper report from Lockton, the world's largest privately held, independent insurance broker. The report—titled "Insuring the Opera- tional Risks of Grocers with Intangible Risk Insurance" —examines the perils grocery retailers face that are not covered by con- ventional property, crime and cyber insur- ance programs. Co-authored by Emily Freeman, Lock- ton Risk Management Specialist, and Lisa McAleenan, Lockton Senior Vice Presi- dent–Financial Services, the report offers expertise on working with a broker and un- derwriter to customize solutions that ad- dress such exposures as: Reputational Harm: This type of cover- age responds to brand damage (as a result of adverse social and traditional media at- tention), which causes loss of business. This could include security and privacy breaches, food safety concerns, allegations about legal compliance, workplace vio- lence, and a disruption in critical computer systems. Regulatory Shutdown/Intervention: As major grocery chains are increasingly rely- ing on independent, third-party certifiers to ensure product safety, this is an increas- ingly important risk peril. Though many chains now have safeguards in place (e.g. vendor certification), government inspec- tors still have the power to potentially shut down individual store(s) for health and safety concerns. Supply Chain Risk: Risks related to nat- ural or man-made disasters, contagious dis- ease, terrorist activity, and war could disrupt the flow of products and the ability of cus- tomers to travel, which may adversely affect revenues. Essential suppliers may not be able to deliver products on time, which could hinder a grocer's ability to operate. Direct and Contingent Network Risk: This type of insurance indemnifies a gro- cery retailer against computer network dis- ruption that impairs its system or any third-party systems it depends on to con- duct business—specifically disruptions that result in a net profit loss. Perils covered in- clude computer attacks, cyber terrorism, malicious damage, and administrative or operational mistakes. Intellectual Property Infringement: Some grocers have purchased companies whose real worth is associated with intel- lectual property (particularly patents devel- oped software for customer internet services). If the acquiring company be- comes the target of an intellectual property lawsuit after the purchase, it may not be able to sell or use the products that that are named in the injunction. To help mitigate these risks, the report au- thors recommend that grocers consult with their insurance brokers and underwriters to tailor or expand policies that address these types of intangible risks. Once the risks are identified, policies may be "stress-tested" with relevant scenarios to provide additional confidence to the potential insured. "While grocers are not required to pur- chase more coverage than is relevant to their traditional risk profiles, these perils can impair or disrupt their own systems or those systems they depend upon," said Freeman. "Consulting with a broker and underwriter to review claims and settle- ment history is a key first step in crafting a policy that addresses unique needs and po- tential exposures." GN GIANT/MARTIN'S Named 2015 Chain Retailer of the Year by Grocery Headquarters GIANT Food Stores and MARTIN'S Food Markets have been named 2015 Chain Re- tailer of the Year by Grocery Headquarters magazine. The recognition was given for the company's deep commitment to commu- nity, its dedicated associates, its emphasis on buying local, and its focus on nutrition. "On behalf of all of our associates, I want to thank Grocery Headquarters for recog- nizing our efforts by naming us Chain Re- tailer of the Year," said Tom Lenkevich, GIANT/MARTIN'S President. "Our associ- ates are driven to engaging our customers, connecting to the many communities we serve, and bringing our stores to life. Our store teams are the foundation of our growth and success, and we are just thrilled by this honor." "GIANT/MARTIN'S historically has oper- ated stores in smaller and rural communities where it built a reputation on offering qual- ity meat, other perishables and groceries at very competitive prices," says Richard Turcsik, Executive Editor of Grocery Head- quarters. "In recent years GIANT/MARTIN'S has made quite a name for itself in more urban and suburban locales and is now the market leader in greater Philadelphia and Richmond. Yet despite its phenomenal growth, GIANT/MARTIN'S stores remain deeply rooted in their local communities, supporting numerous local charities as well as local farmers and manufacturers." "GIANT/MARTIN'S does not rest on its laurels, continually offering competitive prices to make it a market leader, along with services and amenities, including in- store dietitians, health care clinics, Peapod home delivery and hand-held scanners to help shoppers expedite their visit," Turcsik continued. "All that innovation and dedi- cated associates makes GIANT Food Stores and MARTIN'S Food Markets an easy choice to be honored as our 2015 Chain Retailer of the Year." GN

• Cover