23 May 2013 Kraft and Mondelez Questioned Over Food Stamp Lobbying

Chicago, IL / Washington, D.C. – Justin Danhof of the National Center for Public Policy Research challenged the CEOs of two of America’s Fortune 500 companies to explain their lobbying against limiting Supplemental Nutrition Assistance Program (SNAP) “food stamp” purchases to food and beverage items with some nutritional value.

Danhof quizzed the CEOs of Mondelez International, 88th on the Fortune 500 list with $35 billion in annual revenues ($3.028 in profits), and Kraft Foods, 151st on the Fortune 500 list with $18 billion in revenues ($1.642 billion in profits). Mondelez was created as a spinoff from Kraft in October 2012.

“Kraft and Mondelez derive significant revenue from the ever-growing SNAP rolls, which are funded by the American taxpayers, and the current leadership at each corporation is fighting to ensure they get those taxpayer dollars,” said Danhof. “A record 47 million Americans receive these government handouts, which cost the taxpayers $78 billion in 2012.”

In September 2012, the Financial Times reported that Kraft was leading the fight against proposed cutbacks to SNAP. The article noted that up to 1/6th of Kraft’s revenue came from SNAP funds and an even greater percentage went towards its total sales.

“Using 2011 numbers, this means Kraft made $9 billion of its $54 billion revenue from the taxpayer-funded SNAP program that year alone. While neither Kraft, nor the U.S. Department of Agriculture which administers SNAP, breaks down how much of that went to purchase non-nutritional food and treats, it’s obviously a significant enough number to keep Kraft and Mondelez lobbying to protect it,” said Danhof. “Besides, if either CEO knew that a substantial majority of this money was being spent on nutritional products, they would almost certainly jump at the chance to share that information with their shareholders and the public.”

“I have no problem with Americans buying as much junk food and soda as they want with their own money. That’s how the free market should work. SNAP funds do not operate in a free market, however,” said Danhof. “SNAP is a gift of shareholder money, so it is appropriate for the taxpayers to place reasonable limitations to make sure that gift is being used to give folks proper nutrition.”

In addition to fighting federal SNAP reform efforts, Kraft has also opposed state-level efforts to limit SNAP purchases to nutritional items. In February 2012, the New York Times reported on Florida state senator Ronda Storms, who introduced a bill that would have prevented Floridians from spending food stamps on junk food like candy, chips and soda. According to the Times, she ran into fierce opposition from Kraft, among others.

“When I asked Mondelez CEO Irene Rosenfeld on May 21 if she would take the opportunity – stemming from its spin-off from Kraft – to stop lobbying against commonsense food stamp restrictions, she totally avoided the issue,” said Danhof. “She said since the company sells some nutritional items, they were covered on the issue. I have attended dozens of shareholder meetings and spoken with dozens of CEOs, and I must say that Rosenfeld’s ability to talk without saying anything is unrivaled.”

“Even if Rosenfeld didn’t hear what I was saying, the shareholders in attendance sure did. The 150 or so shareholders in attendance loudly cheered and clapped at my call for Mondelez to stop its food-stamp lobbying,” noted Danhof. “In fact, another shareholder was so upset at Rosenfeld’s pathetic response that he screamed out, ‘you didn’t answer his question!'”

Rosenfeld responded by immediately moving to the next question.

On May 22, Danhof confronted Kraft’s CEO Tony Vernon over SNAP lobbying and got a clearer response. Vernon played what Danhof called “the humanitarian card.”

“Vernon said that Kraft’s position regarding SNAP is clear and unwavering – they support it, and will apparently not suffer any restrictions no matter how reasonable. Vernon deflected the primary issue of taxpayer money going to non-nutritional foods and instead claimed that SNAP was a tremendous tool in combating hunger,” explained Danhof.

“After he responded, I explained that many SNAP recipients run out of their benefits before the end of the month, and presented the possibility that folks aren’t receiving enough nutrition because they waste this taxpayer gift on junk so they must scrape to get by at the end of each month,” said Danhof. “I explained that reasonable limitations limiting the purchase of low-nutrition items would perhaps do a better job than the current SNAP system at alleviating hunger and poor nutrition, but Vernon would not budge.”

“The National Center will continue to push for commonsense SNAP limitations that require the purchase of nutritional foods and drinks. It is unfortunate that Kraft and Mondelez will continue to work against these efforts, but that will only strengthen our resolve to look out for the American taxpayers,” added Danhof.

The National Center previously brought up the issue of SNAP funds being used for treats at the Coca-Cola and Pepsi annual shareholder meetings. The National Center’s work discussing the issue of SNAP funds being used to purchase unhealthy treats has received extensive coverage, including over 200 news articles and interviews by publications such as the Atlanta Business Chronicle, the Washington Times, the Milwaukee Journal Sentinel, and the Chicago Tribune. It was also the subject of debate on NPR’s “Tell Me More” program.

The Mondelez and Kraft shareholder meetings were the 26th and 27th attended by the National Center since January 1. In 2012, the National Center participated in 19 meetings.

A copy of Danhof’s question at today’s Kraft meeting, as prepared for delivery, can be found here, and a copy of his question at the Mondelez meeting, as prepared for delivery, can be found here.

National Center chairman Amy Ridenour owns both Mondelez and Kraft stock. Danhof served as her proxy during both meetings.

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than 4 percent from foundations, and less than 2 percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.

Contributions to The National Center are tax-deductible and greatly appreciated.

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