Aug 1, 2003
WASHINGTON, DC — August 1, 2003 — The Food Marketing Institute (FMI) applauded the introduction today of legislation to combat what has become one of the most serious retail security challenges — organized retail theft (ORT) — a crime that costs food retailers up to $15 billion a year and all retailers $34 billion, according to industry research. The Organized Retail Theft Act of 2003 (S. 1553) was authored by Sen. Larry Craig (R-ID), who serves on the Senate Judiciary Committee, which has jurisdiction over criminal justice legislation.

“Organized shoplifting has multiple victims,” said FMI President and CEO Tim Hammonds. “The economic impact extends to the industry, consumers and even to the government in lost taxes. Shoplifting rings create safety risks when they steal, repackage and sell infant formula and drugs past their expiration dates.

“Our laws fall woefully short in giving our criminal justice system the power to deter these crimes and adequately punish the offenders. Most are subject to state laws that treat organized retail theft as misdemeanors. The federal government can prosecute only when the criminals cross state lines.

“The Organized Retail Theft Act would treat these crimes as federal felonies with penalties commensurate with the harm done.”

The proposed law would impose prison terms up to 10 years for anyone associated with organized shoplifting, including the thieves, fences, repackagers, and illegitimate wholesalers, retailers and flea market operators. It also allows victims to pursue civil lawsuits to recover the value of the goods stolen and be compensated for injuries caused by such products.

A recent FMI study — A Report on Organized Retail Theft — noted how ORT is different from petty shoplifting for personal use. “It involves professional theft rings that move quickly from community to community to steal large amounts of merchandise that is then repackaged and sold back into the marketplace.”

The rings target popular, high-value items such as over-the-counter (OTC) medications, infant formula, razor blades, camera film, batteries, videos, DVDs, and smoking-cessation products, according to the FMI report.

“Consumers are at risk when ORT gangs steal the items and do not keep them under the required storage conditions.” the report stated. “If the products are near the end of their expiration dates, ORT middlemen will change the expiration date and lot numbers to falsely extend the shelf-life of the product. In addition, cough and cold products are popular with ORT rings because they can be sold to clandestine labs that manufacture methamphetamine.”

FMI is strongly supporting the legislation as a member of the Coalition Against Retail Theft, a broad-based alliance of companies and associations representing all segments of the retail industry, along with manufacturers.