Food Manufacturers and Organic Industry Lobbyists Circle the Wagons

Two powerful lobby groups in the food industry, The Grocery
Manufacturers of America and the Organic Trade Association, recently intervened
as friends of the court in a
federal consumer class-action lawsuit accusing the nation's largest supplier of
private-label organic milk of consumer fraud. In what has been described as
"the largest scandal in the history of the organic industry" USDA
investigators, in 2007, found that Aurora Dairy had willfully violated federal
organic standards. However, industry lobbyists are now concerned that
convicting Aurora
will set a dangerous legal precedent. Aurora
bottles private-label organic milk for Wal-Mart, Costco, Target, Safeway and
many other grocery chains.

In
August 2007 Bush administration officials were widely criticized for overruling
career staff at the USDA and instead of decertifying Aurora as
staff had recommended, banning it from organic commerce, the corporate
dairy was allowed to continue in business under a one-year probation. Now
agribusiness lobbyists are concerned that citizens prevailing in court, alleging
fraud, will set a precedent necessitating large corporations to incur added
expenses to more carefully check the sources and credibility of their organic
suppliers.

"Due
diligence by food manufacturers and retailers is the heart and soul of what
maintaining the integrity of the organic label is about," said Mark Kastel, Codirector of The Cornucopia Institute,
the farm policy research group that initially exposed the corruption taking
place at Aurora.

In
an internal document, the Organic Trade Association told its membership that,
"OTA is taking this action in order to protect consumers' access to
organic products and the guarantee by organic farmers, producers and processors
that their valid organic certificate fully demonstrates that their product is
considered organic when marketed." Lobbyists from the Grocery
Manufacturers also were concerned that if the consumers prevail in this legal
matter it would become, according to a copy written article in Sustainable Food News, "prohibitively
expensive to continue developing organic products."

"This
type of rhetoric is just a stick in the eye to the ethical participants in this
industry who make it a point, in their everyday course of business, to
judiciously assure that their products meet not only the letter but the spirit
of the organic law," added Kastel.

Just
like Aurora Dairy, Wal-Mart and Target were both found to have misrepresented
organic products in the marketplace and were the subject of separate USDA
investigations.

"Yes,
it does cost more money to legally and ethically participate in organic
commerce, said Will Fantle, Research
Director for Cornucopia. "One of the reasons that big-box retailers are
able to undercut their competition on price is they refuse to hire, train and
adequately compensate management and frontline employees who know anything
about the organic law."

Aurora produces private label, or storebrand milk, for about
20 of the largest grocery chains in the United States.

In
an ironic twist to this story Organic Valley, the nation's second-largest organic milk
marketer and a cooperative, is receiving criticism for its underwriting of a brief
supporting Aurora's
position. The farmer-owned cooperative provided the financial support allowing
the Organic Trade Association to file its amicus brief opposing the class-action
lawsuit brought by consumers in over 40 states. The consumers allege that they
were defrauded by the Colorado-based Aurora Dairy corporation.

The
news of Organic Valley's
involvement was a shock to some of its co-op members including Kevin Engelbert,
a nationally recognized organic leader and dairy farmer from Nichols, New York.
"Can this possibly be true? Has OV made a pact with the
devil? I know OTA is controlled by the big money interests," said Engelbert.
"The 14 willful violations [by Aurora]
prove that some organic certificates aren't enough to demonstrate that a
product is organic when marketed. The 'organicness' of
questionable products must be challenged when necessary to maintain organic
integrity."

The
Cornucopia's Kastel said he was "flabbergasted" that a cooperative
owned by family farmers would stick up for a corporation at the heart of the
biggest scandal in history in the organic food industry and he characterized
Aurora as a "bad actor" and "bad aberration" in the
industry where consumers can generally trust the organic label.

"Aurora's factory farm milk has injured the vast
majority of Organic
Valley's own farmer-members
by depriving them of markets for their milk and unfairly driving down retail
pricing. Earlier this year the cooperative cut the pay price to its members
and required its farmers to reduce production because of a milk surplus in the
marketplace - a surplus that would be much smaller if Aurora legitimately
managed its dairy cows like Organic Valley's ethical dairy
farmers," Kastel added.

Cornucopia
analysis, and USDA research, suggests that as much as a third of the nation's
organic milk supply comes from giant factory farms. Another organic factory
farm operator, Dean Foods, the country's largest milk marketer, and an OTA and
GMA member, has been widely criticized in the organic community for procuring
much of its milk for its Horizon brand from mega-dairies allegedly breaking the
same rules as Aurora.

"If
you connect the dots here you have to wonder why the management at Organic Valley is getting into bed with Aurora,
Dean Foods and the most powerful lobbyists representing corporate agribusiness,"
Kastel lamented. "Not only would Organic
Valley membership benefit from Aurora being banned from
organics, but if the lobbyists concerns are true, and some of the largest
corporate players that have been playing fast and loose with the rules decide
to exit the organics, that will only pump up their brand's market
share."

The
friend
of the court brief, opposing a lower court ruling, which was funded by Organic Valley,
expresses fears about a precedent should consumers be compensated for any fraud
committed by Aurora.
Melissa Hughes, an in-house lawyer for Organic Valley,
told the editor of Sustainable Food News,
that if the appeal is upheld "it could have vast implications on
retailers, processors, handlers, and ultimately consumers."

Analysts
at Cornucopia strongly refute the contention that the Aurora matter would leave all organic
marketers open to tort complaints by consumers. "Obviously, there is
strong evidence for these consumers to believe they were defrauded by Aurora and the supermarket
chains," Kastel said. "This is an exceptional situation not indicative
of the industry as a whole."

Kastel
cited the fact that Cornucopia sent certified letters to every one of Aurora's retailer customers
informing them that the reputation of their store's label was at risk and
encouraging them to take action. Only two marketers, the Publix supermarket
chain in Florida and United Natural Foods
International, the largest organic food distributor in the country, did the due
diligence necessary and switched suppliers.

"The
organic certification documents alone are not enough if evidence is brought to
a marketer's attention that some kind of improprieties are taking
place," Fantle added. "There is always the possibility that
collusion or incompetence has taken place on the part of the supplier,
certifier or the USDA."

A
comprehensive investigative story that appeared in the pages of the Washington
Post referenced the Aurora matter, and a cozy
relationship between the powerful Washington
lawyer and lobbyist for Aurora, Dean and the OTA, and the former director of
the organic program at the USDA. Alleged malfeasance at the Department has
sparked the interest of Congress and an expanded investigation is currently
taking place by the Office of the Inspector General at the USDA.

"Congress
passed the Organic Foods Production Act of 1990 charging the USDA with
preventing fraud; protecting the interests of ethical industry participants and
consumers," observed Cornucopia's Kastel. "The obvious
allegation here is that the regulatory branch, the USDA under the Bush
administration, failed to properly enforce the law. It is appropriate for
citizens who feel they were defrauded to seek a judicial remedy," he
added.

MORE:

When
the nation's largest organic milk producer Aurora
dairy, with five "factory style" farms, in Colorado
and Texas,
each milking thousands of cows, entered the marketplace in 2004 they proudly stated
that they would make organic milk more "affordable." What they
didn't tell their customers was that their products would be more affordable,
allowing them to undercut competitors in the marketplace, because they wouldn't
go to the expense of meeting the strict federal regulations governing organic
marketing.

In 2007, after investigating legal complaints filed
by Cornucopia about Aurora's organic livestock practices, USDA
staff concluded that Aurora had "willfully violated" 14 tenets
of federal organic regulations. Aurora
was found by federal investigators to have been illegally confining their
cattle to feedlots, brought in conventional cattle that could not comply with
organic regulations and, most seriously, selling milk labeled as
"organic" that did not meet the legal requirements.

In its formal letter to the company, USDA staff at
the National Organic Program stated: "Due to the nature and extent of
these violations, the NOP proposes to revoke Aurora Organic Dairy's production
and handling certifications under the NOP."

But
the powerful Washington-based lobby of Covington
in Burling, representing Aurora,
worked with the Bush administration officials at the USDA to instead allow the
$100 million corporation to continue in the organic business with a one-year
probation and some modest changes to their operations

The
"sweetheart" settlement between Aurora and the USDA provoked a
consumer led effort to seek justice in federal courts. Nineteen separate class
action lawsuits were brought against Aurora and several national grocery
retailers selling Aurora's
suspect organic milk including Wal-Mart, Target and Safeway. The lawsuits
claiming consumer fraud were eventually consolidated into a single case in the
federal district court in St. Louis.
Earlier this year, federal court judge E. Richard Webber dismissed the lawsuit
on procedural grounds. An appeal has since been filed seeking to bring the
merits of the lawsuit, which have not been heard, back before the
court.

"OTA's
action, apparently backed by CROPP [Organic
Valley], infuriates me,"
said Kevin Engelbert. "I hope every person and organization that
belongs to OTA drops their membership immediately."