- Days before a federal court case in South Dakota would have forced the U.S. Department of Agriculture to release how much grocery retailers in the food stamp program make each year, the Food Marketing Institute filed a petition asking to be able to get involved and appeal the ruling, according to court documents obtained by Food Dive through Public Access to Court Electronic Records. The court allowed the intervention and granted 15 more days for appeal.
- The initial court case was filed by newspaper Argus Leader under the Freedom of Information Act in August 2011. Last November, a judge ruled that Supplemental Nutrition Assistance Program (SNAP) information was public record, and disclosing it would not cause undue harm to retailers, according to The Argus Leader.
- FMI argued that releasing the data would allow competitors to take unfair advantage of those who participate in the SNAP program. In a supporting document filed by Todd Piland, EVP of Texas and Mexico grocery chain H-E-B, he wrote that the store guards its sales data so carefully, it has opted not to enroll in tax incentive programs that would have required release of the information.
The release of information pertaining to revenues from the food stamp program could have dire consequences for retailers, according to FMI and petitions from grocery leaders and the National Grocers Association.
In an industry with such low margins and such tight competition, retailers don't want to provide more of a window to show how the business is run. Financial figures for a grocery store could embolden competitors — or at least let competitors better understand rival retailers' strengths and weaknesses.
"H-E-B will be unable to prevent its competitors from using the information," Piland wrote in his statement. "Competition in the retail grocery industry is intense. While H-E-B cannot project the dollar value of the harm caused by the release of the SNAP information, it expects to be harmed disproportionately in its market by the release of this information."
The Argus Leader, a newspaper out of Sioux Falls, South Dakota, has been fighting this lawsuit for many years. In a November article about the decision ordering the release of the information, Argus Leader Media's interim News Director Cory Myers said the case was primarily about the "fundamental right of taxpayers knowing where their money is spent. This is a federal program, financed by taxpayers, and the retailers who participate in the program do so voluntarily."
Public records law in the United States makes most information from government programs open and available for disclosure. Some exceptions are made when the information is overly private, puts people unnecessarily at risk, or contains proprietary information that could harm a business. The debate over whether this data would hurt individual grocery retailers was considered both by the South Dakota federal judges as well as a federal appellate court panel in the more than five years the case has been pending.
The newspaper most recently emerged victorious, but there is a chance the ruling will be appealed. According to its court filing responding to FMI's intervention, lawyers for the Argus Leader said that FMI's argument has already failed in this case. "It failed because it did not have the facts to sustain its legal burden under FOIA," the filing reads. "To be blunt, it failed because there is good reason to conclude substantial competitive harm is simply not likely to result from release of SNAP sales data."
While the judge's most recent decision indicates FMI may have an argument worth making, it does not mean the ruling and order will be tossed out. Public interest in the data could still be found to outweigh retailers' desires to keep the information private. If the latest ruling holds, it may serve retailers to look at their accounting and devise a way to safeguard their trade secrets while allowing this information to be disclosed.