WIC inclusion averts milk dumping; SuperMax seeks permit to sell organic variety
By Lorraine Blasor
Special to News is my Business
The introduction of organic milk into the Puerto Rico market, stalled while the slow regulatory process runs its course, will help rather than hurt the local milk industry currently in a state of crisis due to excess production and declining sales, said SuperMax officials eager to add this product on supermarket shelves at the request of cancer patients.
Top executives at the 15-store supermarket chain said the sale of organic milk will help expand the category as a whole plus, by creating a market for this product, could pave the way for local production of organic milk, especially sought out by cancer patients because it is free of chemicals, hormones or antibiotics. In the absence of the product, some patients are reportedly lugging organic milk cartons when traveling back to the island from the U.S.
“We are eager to bring this product,” said SuperMax President José M. Revuelta. “We support the local industry and if there were a local source we would buy from it.”
Meanwhile, SuperMax’s application to sell the product is in bureaucratic limbo while the Milk Industry Regulatory Office (ORIL, by its Spanish acronym) considers the company’s request for both an importer and distributor’s license that would allow it to import organic milk from the mainland and distribute it to its stores. Created by law in 1957, ORIL is charged with regulating local production and importation of milk into the island.
The meticulous regulatory process, now in its 13th month, has apparently involved a lot of back and forth between the agency and the company especially with regards to the label required for the milk carton.
“If it is taking time it’s because the company has taken its time making the necessary changes,” said ORIL Administrator Cyndia Irizarry. “I have a responsibility to consumers.”
Citing cost considerations, SuperMax initially requested to be exempted from the requirement to post the product information on the cartons in both English and Spanish. ORIL denied the request but agreed to allow SuperMax to affix a label onto each carton with the information in Spanish. This, however, is a temporary accommodation and Irizarry said that eventually the company will have to have the bilingual information printed directly on the carton.
When asked at what stage of the process is the licensing request, she replied that it all hinges on the label, the final version of which she has not seen yet.
“The label is a key point,” she said.
As a product with appeal to a small segment of the population, Irizarry said she doesn’t expect more than half a million quarts of organic milk to be sold on the island per year, which should not adversely affect sales of regular milk.
Dealing with the crisis
The milk industry is going through a crisis based on declining sales and excess production that has pitted dairy farmers against Gov. Luis Fortuño’s administration, which they perceive as not doing enough to help them out of their current quandary.
Earlier this year the governor announced that the Women, Infant and Children’s Nutritional Program (WIC) would start using fresh milk instead of the powdered kind, a change seen as a shot in the arm for dairy farmers who quickly moved to increase their production.
While the initiative had apparently fizzled leaving dairy farmers stuck with excess milk they threatened to dump at a loss of some $6 million, Health Department officials said Tuesday it will be implementing public policy instructing nutritionists and program officials to offer fresh milk as a first option.
At a press conference in Hato Rey, Health Department Deputy Secretary Concepción Quiñones de Longo said the initiative received approval from the Food and Nutrition Services in August, requiring WIC participants who receive cow’s milk in their packages to get the choice of fresh milk instead.
“We’re going to promote fresh milk. In cases where there is poor refrigeration, inadequate storage, social conditions, difficulty in preparing meals, the participant is victim of a disaster or incarceration, then they will get powdered milk,” she said.
The WIC program currently has 205,000 participants on the island. Last year, the program distributed 14.9 million quarts of milk at a cost of $22 million among beneficiaries. With the implementation of this new guideline, more than 7.7 million quarts will be distributed, which represents an extra investment of $11 million, Health officials said.
The policy change seemed to appease Gabriel Cordero, head of the Puerto Rico Farm Bureau’s dairy sector, who said, “the Puerto Rican people deserve to get nutritional and quality products, and it’s proven that fresh milk is one of the most complete foods there are.”
The decision, he said, will avert the mass milk dumping contemplated through December.
Organic milk fuels variety
SuperMax’s push for a license to sell organic milk can be seen as part of the chain’s ongoing efforts to expand its product lines and provide consumers with wider food choices.
Once the license comes through, SuperMax plans to sell the Organic Valley brand of organic milk exclusively in its stores but officials did not discard the eventual possibility of supplying other food outlets on the island.
Marketing Manager Daniel Rigau said because organic milk retails at a higher price than conventional milk it will be made available in SuperMax stores located in higher-income areas.
Rigau drew a parallel between bringing organic milk into the local market and the introduction years ago of a lemon-lime soft drink called Mirinda that was in direct competition with 7Up. At the time, a 7Up executive welcomed the upstart drink by telling Rigau, who was with Supermercados Amigos then, that it would expand the lemon lime category and thus “help me as the leading brand.”
The same holds true for organic milk.
“The industry should see it as something that will help move the milk category and develop a market for when local organic milk is available,” Rigau said.
High prices and fewer distribution points are cited among the reasons for the ongoing decline of milk consumption on the island.
Organic milk can be found in most supermarkets in major cities on the mainland. It actually made a brief appearance in Puerto Rico at SuperMax De Diego in 2008, but ORIL stepped in to stop its sale arguing that the company needed a license to sell the product locally.
Michelle Kantrow-Vázquez contributed to this story.