The Wall Street Journal - USA (2020-12-07)

B6|Monday, December 7, 2020 **** THE WALL STREET JOURNAL.

sociation’s head of packaging.

Mars Inc. and Unilever

PLC are among companies

that have said they would

support so-called extended

producer responsibility rules

as part of their broader ef-

forts to reduce plastic waste

and use more recycled mate-

rial in their packaging.

The Consumer Brands Asso-

ciation says brand owners

shouldn’t be saddled with the

entire cost of dealing with their

waste.

“We do not want a scenario

where any one industry or

stakeholder bears all financial

or operational responsibility,”

said Ms. Stasz. “Everybody has

a role to play here.”

improve recycling. The trade

body, whose members include

P&G, Pepsi andGeneral Mills

Inc., had previously questioned

the merits of such policies.

“We recognize these systems

in America have been chroni-

cally underfunded for a decade

or more and can’t handle the

types of packaging in use to-

day,” said Meghan Stasz, the as-

U.S. residential recycling pro-

grams are collecting at least 7%

more waste than last year, ac-

cording to the Solid Waste As-

sociation of North America.

Against that backdrop—

and the threat of potential

bans on some plastic packag-

ing—consumer-goods indus-

try groups say they are more

willing to help pay for recy-

cling services that they have

long argued were the respon-

sibility of governments.

“We will actively support

policy proposals that require

industry funding,” said Dan

Felton, executive director of

Ameripen, a lobby group set

up by companies including

Coca-ColaCo. andColgate-

PalmoliveCo. about a decade

ago in the face of a mounting

wave of legislation aimed at

cutting plastic waste.

The Consumer Brands Asso-

ciation also says it would sup-

port per-item fees on packaging

provided the money is used to

Who should pay to recycle
discarded cereal boxes, drinks
bottles and detergent contain-
ers?
The makers of such prod-
ucts have long fought efforts
to make them pay for the cost
of dealing with packaging
waste. Now, trade groups that
represent companies like
Procter & Gamble Co. and
PepsiCoInc. are softening that
stance, as consumers become
more concerned about plastic
waste and municipalities
struggle to cover the costs of
their recycling programs.
Federal and state lawmakers
in the U.S. are proposing bills
to push companies to pick up
the tab for managing empty
soda bottles, candy wrappers,
cereal boxes and other packag-
ing they use. Such rules could
help pay for curbside collection
and sorting infrastructure, and
spur companies to design pack-
aging that is easier to recycle,
lawmakers say.
Charging companies “puts
the financial burden of plastic
pollution back on the manufac-

A worker sorts plastic refuse into color, clear and milk categories at the Norton Environmental Recycling Plant in Flagstaff, Ariz.

DAWN KISH FOR THE WALL STREET JOURNAL

BUSINESSWATCH

BIG LOTS

E-Sales, Holiday

Bolster Revenue

Big LotsInc. reported an 18%

increase in revenue, boosted by

e-commerce sales and holiday-

based shopping.

Chief Executive Bruce Thorn

said that e-commerce and overall

demand jumped 70% year-over-

year in the period. Seasonal

goods, including Christmas-centric

products as well as Halloween-

and harvest-themed items, saw

sales grow by 42%.

Solid furniture sales reflected

consumers’ continued focus on

the home amid the Covid-19 pan-

demic, he said. “We would as-

sume at this point that there’s a

reasonable likelihood that the

nesting trend will continue to

some degree” into next year, Mr.

Thorn said.

The Columbus, Ohio, retailer

logged a profit of $29.9 million, or

76 cents a share, compared with

a profit of $127 million, or $3.25 a

share, a year earlier. Revenue rose

to $1.38 billion. Comparable sales

grew by 18%.

—Matt Grossman

GENESCO

Back-to-School

Orders Decline

GenescoInc. said its profit and

sales for the latest quarter fell

because of lower back-to-school

orders and the effect of store clo-

sures during the Covid-19 pan-

demic.

The owner of Journeys and

other footwear brands reported a

third-quarter profit of $7.47 mil-

lion, or 52 cents a share, com-

pared with $18.9 million, or $1.31

a share, a year earlier, Excluding

items, earnings from continuing

operations were 85 cents a share

in the three months ended Oct.

31.

Sales fell 11% to $479.3 million.

E-commerce comparable sales

grew by 62%, the company said.

As of Friday, the company was

operating in 97% of its locations,

it said.

—Dave Sebastian

AMERICAN AIRLINES

Demand, Forward

Bookings Slow Down

American Airlines GroupInc.

said it has seen a slowing in de-

mand and forward bookings be-

cause of the recent acceleration

of the Covid-19 pandemic.

The airline said that following

a strong start to the fourth quar-

ter, rising Covid-19 case counts

and associated travel restrictions

in the immediate period leading

up to the Thanksgiving holiday re-

sulted in a slowing of net book-

ings growth, which has persisted

into December.

American Airlines now expects

fourth-quarter average daily cash

burn to come in at the high end

of its previously forecasted range

of $25 million to $30 million a

day.

—Chris Wack

turers who generate it and

profit from it,” said Sen. Tom

Udall (D., N.M.), who this year

introduced a bill that would

make companies pay to collect

and process waste. Several

states including Massachusetts,

New York and Washington are

considering similar measures.

Packaging has become more

complex of late, often being a

mix of materials such as alumi-

num layered with different plas-

tics to make baby and pet-food

pouches. Most recycling facili-

ties can’t handle these. Also, a

2018 ban on waste imports by

China, historically the biggest

buyer of used plastic from the

U.S., created a glut of recycla-

bles with nowhere to go. Ninety

two recycling programs have

been eliminated in the U.S. since

late 2017, according to the Recy-

cling Partnership, a nonprofit.

Covid-19 has exacerbated the

problem. Single-use plastic vol-

umes have jumped just as cities

and towns face budget short-

falls, and recycling streams are

more contaminated as house-

hold waste displaces the cleaner

material that typically comes

from offices and businesses.

BYSAABIRACHAUDHURI

Brands Bend

On Paying

For Recycling

BUSINESS & FINANCE

fied damages and to recoup le-

gal fees, according to the suit.

Representatives for Tyson

and Perdue said that Chick-fil-

A’s claims were unfounded and

that the companies would con-

test them. A Sanderson spokes-

man declined to comment. Rep-

resentatives for Pilgrim’s didn’t

respond to requests for com-

ment.

The lawsuit adds one of the

U.S. poultry industry’s biggest

customers to a four-year legal

battle over alleged collusion

among companies that produce

the bulk of the roughly 37 bil-

lion pounds of chicken con-

sumed annually in the U.S.

Major supermarket opera-

tors and food-service distribu-

tors have filed civil suits alleg-

ing anticompetitive behavior,

and this year the U.S. Justice

Department indicted senior

chicken-industry executives and

sales officials on criminal

charges of bid-rigging and

price-fixing. The defendants

have pleaded not guilty to the

criminal charges, and major

chicken companies are contest-

ing the civil-court claims.

Known for its trademark

crispy fried-chicken sandwich,

Chick-fil-A is the largest

chicken chain in the U.S. by to-

tal sales, followed byKFCand

Popeyes Louisiana Kitchen,

according to industry research

firm Technomic Inc. It is also

one of the fastest-growing do-

mestic fast-food chains, racking

up $12.2 billion in sales across

2,493 locations last year, Tech-

nomic data showed.

Lawyers for Chick-fil-A said

in the complaint that the chain

negotiated directly with poultry

companies and entrusted them

with recipes. Chick-fil-A, ac-

cording to the complaint, “pur-

chased billions of dollars worth

of broiler chicken from defen-

dants and/or their co-conspira-

tors throughout the relevant

period at prices that were arti-

ficially inflated.”

A Chick-fil-A spokeswoman

declined to comment.

Chick-fil-A, along with KFC,

Popeyes,KrogerCo.,Walmart

Inc. and others, was named in

November by the Justice De-

partment as a victim in what

the government has alleged

was a long-running effort

among chicken-company execu-

tives and salesmen to coordi-

nate bids and compare notes on

major chains’ chicken purchas-

ing. Justice Department attor-

neys, quoting from text mes-

sages and other

communications, alleged that

employees of competing poul-

try companies exchanged prices

and other details while negoti-

ating chicken-supply deals for

major restaurant chains.

Since early June, the Justice

Department has charged 10

current and former chicken-

company employees, including

two former chief executives of

industry giant Pilgrim’s Pride,

in the agency’s continuing in-

vestigation.

Chick-fil-A’s civil lawsuit,

filed in the U.S. District Court

for the Northern District of Illi-

nois, incorporated those same

allegations, and named more

than a dozen major U.S. poultry

suppliers as defendants. Law-

yers for the chain said in the

complaint that Chick-fil-A was

identified in the Justice Depart-

ment’s indictment as “QSR-5,” a

fast-food chain that in 2014 an-

nounced plans to eliminate an-

tibiotics from its chicken sup-

ply. Chicken producers have

used the drugs to help birds

add weight more quickly and

defend large-scale farms from

disease.

After Chick-fil-A’s announce-

ment, according to the Justice

Department, employees of Pil-

grim’s Pride, Tyson, Perdue and

smaller chicken supplierClax-

ton Poultry Farmsdiscussed

via phone what they planned to

charge Chick-fil-A. The compa-

nies aren’t identified by name

in the indictment, but people

familiar with the probe con-

firmed their identities.

“He said they are supposed

to give a number to [QSR-5] to-

day,” said Scott Brady, an em-

ployee of Claxton, in a text

message to a colleague that re-

ferred to a competing chicken

salesman, according to the in-

dictment. “I told him we were

.31 to .32 per lb on finished

product.”

A Claxton spokesman de-

clined to comment.

Chick-fil-A also alleged that

chicken companies improperly

coordinated to influence a

widely used chicken-pricing

benchmark and coordinated

chicken production through an

industry benchmarking service.

—Heather Haddon

contributed to this article.

Chick-fil-AInc., the leading
U.S. chicken chain, sued major
poultry producers, accusing
them of price fixing that the
Atlanta-based company says
led to inflated prices for bil-
lions of dollars worth of its
chicken purchases.
The chicken-sandwich giant
alleged in a lawsuit filed Friday
in a federal court in Illinois that
top chicken suppliers, including
Tyson Foods Inc.,Pilgrim’s
PrideCorp.,Sanderson Farms
Inc. andPerdue FarmsInc., co-
ordinated pricing for meat sup-
plies and collectively reduced
production to push up prices.
Chick-fil-A is seeking unspeci-

BYJACOBBUNGE

Chick-fil-A Sues Suppliers Over Pricing

Chain cites collusion

by top poultry firms

following federal

charges for executives

Overseas, Chipping

In Is Nothing New

Brand owners have long

paid toward the cost of man-

aging their packaging waste

in parts of Canada and Eu-

rope, and more recently have

done so in big emerging mar-

kets like India.

Companies either pay for

packaging recycling programs

through umbrella organiza-

tions or reimburse municipali-

ties directly.

Fees are based on the

weight of packaging sold, but

also account for the cost of

recycling items and the re-

sale value of materials.

In the U.S., manufacturers

pay toward waste manage-

ment for just a handful of

items, such as paint, batter-

ies and mattresses.

Advocates say such mea-

sures boost recycling rates.

In Germany, where compa-

nies have had to pay toward

managing packaging waste

since the early 1990s, the re-

cycling rate for municipal

solid waste stood at 67% in

2018, according to govern-

ment data.

By contrast, the U.S. rate

is 25% based on 2017 data—

the latest available—from the

Environmental Protection

Agency.

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