FOR IMMEDIATE RELEASE: May 22, 2007

Schumer Reveals: USDA Recently Eliminated Inspectors At Beech Nut's Canajoharie Plant, Leaving Lone Inspector Unable To Keep Pace With Company's Growth

A Recent Decision to Reduce Inspectors at Beech Nut's Canajoharie Plant is Slowing Down Production and Could Hamper Plans for Future Expansion

Senator Requests USDA Immediately Assign a Second Full-Time Inspection Shift So Beech Nut can Operate at Peak Performance

Today, U.S. Senator Charles E. Schumer revealed that current operations, and the future growth, of Beech Nut Nutrition Corporation (Beech Nut) are jeopardized due to the United States Department of Agriculture (USDA) slashing the number of inspectors at the company's Canajoharie plant. Concerned that Beech Nut's recent growth, including last week's announcement that it will open up a new headquarters in Montgomery County, will be stymied by the lack of on-site inspectors, today Schumer sent a letter to the USDA requesting that it immediately assign a second full-time inspection shift to the Canajoharie plant.

"The USDA needs to immediately assign a second-shift of inspectors to the Canajoharie plant so Beech Nut can continue to run at peak performance," said Senator Schumer. "For decades, Beech Nut has helped anchor the Mohawk Region's economy, and with last week's announcement that it will construct a new headquarters in Montgomery County, we must keep this momentum surging," said Senator Schumer.

The process by which Beech Nut produces its meat-based baby food must be monitored by USDA inspectors. However, USDA recently decided to eliminate all "minimal" and "limited" inspection services - a practice in place since the 1970s - leaving Beech Nut with only one full time inspector and no additional coverage, which could curtail the plant's current operations and plans for future growth.

Beech Nut's rigorous baby food production schedule, including preparing, cooking, cooling and packaging it in a sanitary fashion, requires two full time inspector-shifts or other equivalent staffing arrangements. Before the recent reduction of inspection services, the Canajoharie plant received inspection over the course of their 20-hour production schedule. The USDA did this by combining a single full-time inspector shift with a combination of overtime and "limited coverage." The current arrangement has left them with a single inspector, creating inefficiencies and forcing Beech Nut to drastically alter how their products are made.

"After surviving competition and floods, Beech Nut is poised for growth and the USDA must do all it can to help that happen. It makes no sense to reduce inspection shifts at exactly the moment when Beech Nut is set for take-off," said Schumer.

However, this April, the Food Safety and Inspection Service (FSIS) issued a notice suspending its longtime practice of providing roving inspectors outside of the standard business day. While the decision was designed to require more intensive inspection services, Beech Nut is unable to qualify for additional full time shift coverage because it only produces meat-based foods three days a week. And USDA has indicated that it would only add a second shift if Beech Nut's Canajoharie plant was active for a full, five-day work week.

In his letter to the USDA, Schumer wrote, "denying Beech Nut's request on this basis reflects an unfortunate failure to understand the unique needs of their facility. With over 100 different products in production, several of which do not require USDA inspections, Beech Nut would have to change their entire business operation just to enter a production schedule that needed inspectors 5 days a week. The company estimates that they will suffer a loss of at least $3 million if they do not have coverage equivalent to its previous level."

Beech Nut has been an economic lynchpin for Montgomery County and the entire Mohawk Valley Region since 1891. Last week, Beech Nut announced it will build a 650,000 square-foot processing and packaging plant in Florida, Montgomery County, N.Y., and relocate its corporate headquarters from St. Louis to the new building. It also announced its intention to add an additional 135 jobs to the 356 who are currently employed at their facility. Over the last several years its production has increased by nearly 50%, and in the next several years it is hoping to increase its production by an additional 25%, which could create additional jobs and millions of new investment in the region.

Schumer has long been instrumental in Beech-Nut's success in upstate New York. In the summer of 2006, Schumer worked with Empire State Development Corporation and the U.S. Small Business Administration (SBA) to construct an incentives package to save Beech-Nut's Canajoharie plant after it suffered severe flood damage. In February 2000, H.J. Heinz, Inc. and Beech-Nut's parent company, Minot Holding Corporation, announced a planned merger which threatened operations at both the Canajoharie and Fort Plain production plants. Schumer intervened with the Federal Trade Commission (FTC) and asked it to delay approving the merger until Heinz completed its review of the local plants. One week later, the FTC began its ultimately successful effort to block the merger. In the winter of 2002, Schumer also helped launch a new product line, called First Advantage, at the Canajoharie Plant.

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