CONTENTS

The Returns to Brand Advertising in the California Almond Industry

Manager's Viewpoint

California Almond Program Litigation Returns to 9th Circuit Court of Appeals

Editor's Notes

Director’s Corner

NEC-63 Denver Meeting Notes

Next Meeting

Manager's Viewpoint

by Roger Wasson
President & CEO Almond Board of California

December 23, 1994, Christmas vacations around the Almond Board came to an abrupt end with a phone call that said our industry self-help program was “unconstitutional.” We later learned that the decision was narrower in its scope than we were first told. After more than 2 years of managing state and nationally legislated voluntary check off programs in several commodities, I thought I had experienced it all. However, there hasn’t been anything that compares to the organizational roller coaster ride we were about to take.

When I accepted the Board’s offer a year and a half earlier to move to California, there was some explanation of very old on-going litigation. However, the consensus was that it wasn’t going anywhere. Besides, court challenges go with the territory for California marketing orders. Consequently, no one was surprised that the Appeals Court ultimately rejected 22 of 23 points of contention, but everyone was shocked that an advertising program would end up being called “unconstitutional.”

In the months that followed, a number of other almond handlers filed suit against the USDA to avoid paying their advertising assessments. Although the current program was changed from the original program, some handlers felt that paying assessments was suddenly a voluntary matter. Others feared that any assessment they paid might ultimately be used to pay back their competitor who brought the original suit. To avoid further erosion of support, the Board suspended all advertising programs.

Without advertising programs, the agency and our marketing staff departed. Without an aggressive marketing campaign, our research began to show a decline in consumer awareness and attitudes.

The decision has also affected our international programs. With the industry split on the continuation of promotion programs in the shadow of ongoing litigation (appeals and new petitions), there was insufficient support on the Board to continue the Almond Industry’s MPP Program. Efforts to return to an EIP program (branded only) have resulted in the FAS substantially reducing the Almond Industry’s allocation.

Perhaps one of the most costly effects has been that Almond Board resources (funds, staff, and elected leadership time) were drained as we worked on appeals and fought off challenges to the new advertising program. Fortunately, we were joined in our efforts to defend self-help programs with key experts including: Dr. Margaret Campbell, Dr. Hoy Carman, Dr. Jason Christian, Dr. Olan Forker, Dr. Henry Kinnucan, Dr. Richard Sexton, Dr. Ronald Ward, Dr. Russell Winer, and Dr. Stephen Young. Dr. Michael Wohlgenant and Dr. Scott Davis were recruited by the other side to work against the Board and find holes in the research done on our behalf. At this time we are still awaiting the results of the hearings on the recent advertising program.

Fortunately, I can report that our situation is beginning to improve and we suspect that the light at the end of the tunnel is not an oncoming train. An energetic group of industry leaders has stepped forward to help get the industry’s promotion efforts back on track. One group has filed an amicus brief (friend of court) on the appeals of the old program and another group has weighed in with an amicus brief in defense of the new program. Others have successfully worked to bring some new leaders to our Board and committees. Our most ambitious public relations and research program to date (including an international dimension) has been unanimously approved by our Board. And, we received nearly 100 percent compliance with our last assessment, in record time. Maybe the adversity has brought out the best in our industry.

Our challenges are far from over; the appeals could continue for years. However, we are learning that we can still work together on industry-wide self-help programs. We will have to be careful to address the concerns expressed in the original judgment; it can be done. We will have to be extremely aware of our goals and carefully measure results. Finally, we must reach out to all “individual” segments of the industry. The Courts are insisting that the “will of the majority” is not all that matters.