Money Makes The Difference

An interesting story in the Minneapolis Star-Tribune looking into food company and grocery store practices that basically raise the cost of your shopping.

Supermarket giant Safeway Inc., which operates about 1,800 stores nationwide, received $2.3 billion in slotting fees and vendor allowances in 2001, almost $1 billion more than its profit for the year. Closer to home, Austin-based Hormel Foods Corp., maker of Spam and Jennie-O turkey products, spent $239 million on slotting and other promotional fees in 2001. Cheerios maker General Mills Inc. made $2.2 billion in promotional payments, including slotting fees, in 2001, an amount equal to 22 percent of annual sales.

"Imagine what might happen to the price of a box of cereal if General Mills didn't have to pay that," Ausura said.

Indeed.