The Need to Prevent Barn Fires

The recent unfortunate conflagration on a farm in Western Michigan resulting in the loss of a cage-free unit with 300,000 hens stimulated a review of fires on egg-production units both in the U.S. and the EU. During 2017 about 1.4 million hens were lost to fire in three incidents in Pennsylvania, Utah and Indiana.  In addition to fires involving older high-rise houses there have been a number of incidents involving destruction of newly completed barns and units under construction.

 Canada documented the loss of half a million hens in a series of barn fires from 2015 through 2018.  It must be remembered that the Canadian controlled marketing system restricts the number of hens on a farm and barns seldom house more than 20,000 birds, suggesting a relatively large number of fires.  Between 2017 through late 2019 the Netherlands recorded fires resulting in the loss of 500,000 hens.  Again, farms have relatively small barns as producers belong to horizontally integrated cooperatives.  In contrast, Germany did not record any losses of hens due to fire.  This may be attributed to the fact that fire alarms and sprinklers are mandatory in livestock buildings in this nation.

In reviewing specific cases, malfunction of electrical equipment including overheating motors and substandard wiring are responsible for fires in older high-rise houses.  A few cases of losses in newly constructed buildings are attributed to deviations from acceptable structural and electrical codes and defective circuit breakers.  It is considered significant that most fires occur at night resulting in total loss of at least the house involved in addition to death and depressed egg production due to smoke inhalation in adjacent houses located on in-line complexes.  This obviously points to defective or absent alarm systems or a delay in the response of managers.

The large capacity and hence cost of multi-level cage-free aviary housing elevates the financial consequences of a fire.  At a nominal $30 per hen housed, a structure and equipment involves an investment approaching $10 million if only one barn is impacted.  The value of the flock, depending on age and hence amortization, may range downwards from $1.2 million.   To this must be added the loss of income and the costs of disruption and temporary repairs to continue operation. 

With increasing capital cost and consequential losses associated with a single incident, insurance companies are reassessing risk.  As with floods and hurricanes, any upsurge in claims will result in a reevaluation of premiums and deductibles, placing a greater burden on the insured.

The welfare and public relations aspects of fires which may result in the loss of 300,000 hens in a single barn have yet to be evaluated.  In the past, extensive mortality from heat prostration associated with climatic extremes generates considerable criticism of “factory farming”, detracting from the image of the egg industry.

It is axiomatic that the time taken to respond to a fire especially at night in a rural area results in the loss of at least the affected barn.  All that first responders can do is to contain a fire and prevent spread to adjacent buildings frequently located too close to prevent secondary loss.

Prevention of fires requires a coordinated approach to the design of buildings and selection of fire-proof construction materials.  Wood and pressboard are inexpensive but are inflammable and as a complementary issue are impossible to decontaminate.  Given that electrical wiring and installations are the major cause of fires, all new buildings should confirm to the National Fire Protection Association, Fire And Life Safety Animal Housing Facilities Code.  This Manual is available from the NFPA at a cost $52 by accessing <www.nfpa.org>.


Egg Industry News

Special Report: What is Included in the U.S. China Phase-One Agreement?

Phase-One of an presumed comprehensive trade agreement between the U.S and China was signed yesterday in Washington. The compromise followed a prolonged period of negotiations punctuated by mutual imposition of successive tariffs and alternating threats and accommodations. The questions circulating in media involve issues such as:-

· Is the U.S. better off in trade relations with China following Phase-One rather than the status quo in 2017 or a comprehensive 'Grand Deal' promised by the Administration?

· Did the end result justify costs borne by farmers, manufacturers and consumers over 20 months?

· Did the Administration achieve objectives promised in pre- and post-election rhetoric?

· Which of the parties lost or gained more than their adversary?

A significant take-away from the most recent events starting with an international meeting in October 2019 and thereafter has been the difference in the tone and claims by Washington and Beijing. This is still carrying over to the events of January 15th especially with regard to agricultural imports. The White House maintains that China will purchase up to $50 million in agriculture commodities over a two -year period. The chief negotiator for China, Vice-premier Liu He stated that "agricultural purchases would not come at the expense of other nations". This implies that China will continue to import commodities in accordance with their requirements and at prevailing world prices, allowing Brazil and Argentina to compete with U.S. in supplying soybeans, the largest single commodity imported by China.

In assessing the scope of Phase-one from media disclosures, it is evident that the following provisions are included:-

Poultry Imports from the U.S.

Although the magnitude of agricultural imports is in question, it is evident that China has removed unjust restrictions on the importation of U.S. rice, chicken and dairy products. to the Politically significant corn and soybean farmers in the Midwest are apparently back to pre-2018 status only if China actually imports quantities of commodities as anticipated by the Administration. China will no longer use contrived barriers against importation and will abide by WTO and OIE regulations with respect to chicken and turkey products. Although the broiler industry appears to have scored a victory with the prospect of exporting leg quarters there is always the presumption that China may demand reciprocal import of white meat by the U.S. This is unlikely at present with ongoing African swine fever but the issue will arise when the disease is controlled and herds have been restored to 2017 levels. It is not credible that China will import egg products as the nation is more than self-sufficient, being the World's largest producer.

Imports of Merchandise from the U.S.

Beijing will increase imports of manufactured goods and purchase services by an additional $200 billion annually over the next two years, based on 2017 values.

Structural Issues

China has agreed to recognize the integrity of intellectual property. This was a long-standing and major point of contention. The Phase-One Agreement includes obligations by China but it is unknown whether the Nation will in fact abide by their commitments given a preoccupation with the Made in China 2025 initiative. Concern over compliance is the reason for the U.S to retain some tariffs as leverage. China has removed obstacles to U.S. finance and banking institutions and providers of services to allow a U.S. presence in China. The situation with regard to Huawei has yet to be resolved.

Relaxation of Tariffs

The U.S. will halve the 15 percent tariff on approximately $120 billion in imports from China. The U.S. is holding in abeyance a tariff of 15 percent on imports to the value of $156 billion due to have been introduced in mid-December 2019. A 25 percent tariff will remain on $250 billion in annual imports from China.

Dispute Resolution

China and the U.S. have agreed on procedures to resolve complaints by U.S. businesses entering into joint-venture arrangements with partners in China. China has agreed not to devalue its currency and in return the U.S. has removed China from the list of currency manipulators.

Critics note that neither subsidies to state-owned enterprises nor cybersecurity are included in the current Phase-One Agreement although these issues will be referred to the WTO. Comments on the Phase-one agreement suggest that it lacks specificity with respect to patents and intellectual property especially with regard to biologics and pharmaceuticals.

Both parties have the right to impose additional punitive tariffs in the event of non-compliance or alternatively to withdraw from the Agreement. The concordance of objectives leading to the Phase-One agreement is obviously based on mutual acceptability of the provisions negotiated at great length, requiring diplomacy, knowledge and patience on both sides.

Although the agreement was presented as being between equals, it is evident that China has made more concessions, if in fact they intend to follow through with protection of intellectual property and other structural issues that initiated the dispute. China was only induced to make changes following economic hardship arising from successive imposition of tariffs.

The Phase-One agreement is not perfect and obviously will not satisfy all stakeholders. The ink is not yet dry but already the agreement has engendered criticism influenced by political considerations. The challenge will be the next stage loosely termed Phase-Two. Although negotiations will be initiated within days of signing this first agreement, the issues are so profound to the economies of both nations that a rapid resolution is unlikely. The President has indicated that a Phase-Two agreement may only be possible after the 2020 election. This belies the 2018 declaration that "trade wars are easy to win and are short".



Export of Shell Eggs and Products January-November 2019.

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing the first eleven months of 2019 with the corresponding period in 2018:-


Jan.-Nov. 2018

Jan.-Nov. 2019


Shell Eggs


Volume (m. dozen)



+23.3 (+21.0%)

Value ($ million)



-14.4 (-12.0%)

Unit Value ($/dozen)



-0.29 (-26.9%)

Egg Products




Volume (metric tons)



-660 (-2.3%)

Value ($ million)



-11.1 (-10.9%)

Unit Value ($/metric ton)



-454 (-12.9%)





Egg Monthly

Review of December 2019 Production Costs and Statistics.

  • December 2019 USDA ex-farm blended nest-run benchmark price was 81 cents per dozen or 24.2 percent lower than in November 2019 at 106.8 cents per dozen. Higher price during early December was consistent with seasonal purchase trends but was moderated in extent and duration by oversupply.
  • December 2019 USDA average nest-run production cost was 0.1 cent per dozen higher than November 2019 at 59.9 cents per dozen.
  • December 2019 USDA benchmark nest-run margin attained a positive value of 21.1 cents per dozen compared to a positive margin of 47.0 cents per dozen in November.
  • November national flock ( over 30,000 hens/farm) was up 4.2 million or 1.3 percent to 323.7 million.
  • November pullet chick hatch was down 8.1 percent from October to 23.9 million.
  • November exports of shell eggs and products were down 16.9 percent to 795,800 case equivalents representing the theoretical production of 10.8 million hens.



Summary tables for the latest USDA December 2019 prices and flock statistics made available by the EIC on January 14th 2020 are arranged, summarized, tabulated and reviewed in comparison with values from the previous December 6th 2019 posting reflecting November 2019 cost and production data.


Egg Week

USDA Weekly Egg Price and Inventory Report, January 16th 2020.

  • Hen numbers in production unchanged at 336.7 million .
  • Shell inventory down by 7.0 percent after a 4.7 percent increase last week reflecting purchases by chains to refill depleted stock.
  • USDA Midwest benchmark generic prices for Extra large and Large down 15.2 percent on average to 62.5 and 60.5 cents per dozen. Mediums were down 5.2 percent to 54.5 cents per dozen. Market has probably bottomed.
  • Price of breaking stock down 7.5 percent to 24.5 cents per dozen. Checks down 10.7 percent to 12.5 cents per dozen reflecting shell-egg prices. Both categories are now substantially below the USDA November benchmark nest-run production cost.



According to the USDA Egg Market News Reports posted on January 13 th 2020 the Midwest wholesale prices for Extra Large and Large as delivered to DCs were down 15.0 and 15.4 percent respectively to 62.5 and 60.5 cents per dozen. Mediums were 5.2 percent lower at 54.5 cents per dozen reflecting a restoration of balance from young flocks. Prices should be compared with the USDA benchmark average 5-Region blended nest-run cost of 59.9 cents per dozen in December 2019, (excluding provisions for packing and transport). The progression of prices during 2018-2020 is depicted in the USDA chart reflecting three years of data, updated weekly.

The January13th 2020 USDA Egg Market News Report (Vol. 67: No. 02) documented a USDA Combined Region value rounded to the nearest cent, of $0.80 per dozen delivered to warehouses for the week ending January 7th. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.72 per dozen. At the high end of the range, price in the South Central Region attained $0.86 per dozen. The USDA Combined Price last week was 26 cents per dozen below the three-year average of $1.10 per dozen and 39 cents per dozen below the price during the corresponding week in 2019.


Updated USDA Projections for 2018 and 2019 U.S. Egg Production

The USDA Economic Research Service issued an updated forecast of egg production on January16th 2020 updating the previous December 16th 2019 report. The volume of eggs produced and per capita consumption in 2019 were increased by 3.1 and 2.1 percent respectively compared to 2018 data. The discrepancy represents over-production and hence lower prices. The benchmark New York price was accordingly reduced by 31.9 percent in unit value. Production data reflecting 2016 and 2017 should be compared to 2015, impacted by the Spring outbreak of HPAI in the upper-Midwest. The price elasticity of eggs is denoted by the disparity in the decline in the New York price benchmark relative to forecast volume of production. The latest data is reflected in the table below:-










2018 2019 Difference % 2020

(actual) (forecast) 2018 to 2019 (projection)





Production (m. dozen)




7,952 8,200 +3.1% 8,300


Consumption (eggs per capita)




284.0 289.9 +2.1% 293.3

New York price (c/doz.)




138 94 -31.9% 95.5


Source: Livestock, Dairy and Poultry Outlook -January16th 2020

*Impacted by Spring 2015 HPAI outbreaks. Consumption in 2014, 267 eggs per capita

Subscribers to EGG-NEWS are referred to the postings depicting weekly prices, volumes and trends and the monthly review of prices and related industry statistics.



UMCA Approved by Senate


Following the 385-41 vote in the House in late December the Senate approved the revised USMCA by a bipartisan 89-10 vote yesterday and sent to the desk of the President for his signature. The agreement will now have to be approved by the Parliament of Canada before replacement of NAFTA the intention of all three nations.


The passage of the USMCA will benefit both the agricultural and industrial sectors of the economy and will generate new job opportunities and trade.


Borden Dairy Company Files For Chapter 11 Protection

Borden Dairy company, established 163 years ago, filed for Chapter 11 bankruptcy protection in Delaware on January 5th. The company had $1.2 billion in 2018 sales that generated a loss of $14.6 million. The loss in 2019 will exceed $45 million.


Borden has twelve manufacturing plants, 75 distribution centers, and draws milk from 260 family-operated dairy farms and farmer’s cooperatives. The company distributes through major supermarket chains and supplies school districts.


The action by Borden follows a previous filing under Chapter 11 by Dean Foods. Problems facing large dairy companies include consumer preference for milk substitutes, vertical integration by chains including Walmart (which opened a large midwest dairy), and overproduction. Margins have shrunk as a result of higher costs for raw milk, and increasing transportation expenses.


It is estimated that the assets of Borden are in the region of $100 million and according to Bloomberg News, liabilities may exceed $500 million. In July 2017 Borden Dairy negotiated: a $275 million credit facility comprising a $30 million term loan held by PNC Financial Services Group, a $175 million term loan held by other lenders, including KKR and Company, and a $170 million revolving credit facility provided by PNC.


The CFO of Borden, Jason Monaco, noted that negotiations to restructure the company with a forbearance agreement expired on Monday, January 6th and the company needs to draw down from a $826 million account to reimburse milk suppliers.


Borden has 3,200 employees of whom a quarter are subject to a union bargaining agreement.

The majority owner of the company, Acorn Investments LLC, will be instrumental in the reorganization.


The plight of the dairy industry should be a warning to egg producers, given prolonged low prices and mounting losses. It is indeed fortunate that the industry has not experienced escalation in feed costs, which has restrained losses in a market oversupplied by at least 5 million hens.


Activists Suspected in Exotic Farm Intrusion

The Riverside County sheriff is investigating an intrusion involving the release of llamas and emus at an exotic farm in Perris, CA.  Apparently on New Year’s Day, a fence was cut allowing animals to escape. Subsequently when rounded up between twenty and thirty llamas were missing.


Previously animal rights activists had claimed that the livestock on the facility was abused although investigations failed to reveal any evidence of maltreatment according to the Riverside County Animal Services Department.


It is noted that the Perris area is involved in the twenty-month ongoing Newcastle disease outbreak.  Obviously animal activists breaking into facilities are certainly not going to observe biosecurity procedures. This represents a risk to any commercial farms that may receive the attention of what may be regarded as domestic agricultural terrorists.


Alltech Introduces ChikPek™

ChikPek™ produced by Alltech is a grain and mineral-based block intended to divert instinctive pecking behavior in flocks.


The block contains calcium carbonate, grains, lignin, salt and vegetable oil.


Alltech recommend one block per 1000 hens with additional blocks if pecking behavior is exhibited by the flock.


ChikPek™  is compatible with conventional nutrition programs and contributes to welfare by reducing injurious pecking.  Blocks are available from the Alltech® store store@alltech.com




American Egg Board Issues Updated Buyers Guide

The downloadable buyer guide issued by the AEB lists 44 suppliers of egg products www.aeb.org/food-manufacturers


Companies are arranged alphabetically and by specific product for ease of reference. Individual links are provided including a profile and contacts, detailing availability of frozen and refrigerated items from each supplier.


Grubhub Inc. Exploring “Strategic Options”

Grubhub has seen its market capitalization decline from $13 billion to $5 billion in a year. The Company is evaluating strategic options including sale or merger.  Possible partners include DoorDash, Postmates or Uber Eats.  The fact that Grubhub is a public quoted company could be attractive to a closely held enterprise.


The food delivery business is decidedly unprofitable and if state regulations impose restrictions on the independent-contractor status of delivery personnel, the business model of virtually all delivery companies will be in jeopardy since they rely on the gig-economy to survive.


Contaminated Apple-Packing Plants Potentially Involved in Listeria Infection

A recent study conducted by a research group at the University of Michigan* demonstrated the prevalence of Listeria monocytogenes both on apples and the environment of the packing plant.  Among three fruit packing facilities sampled, one had significantly high levels of Listeria monocytogenes.

In evaluating the reasons for the differences among packing plants, the scientist determined that biofilms on food contacts surfaces promoted the proliferation and persistence of Listeria. Research demonstrated that Pseudomonas spp. are responsible for biofilms that protect Listeria from decontamination. The knowledge gained from the investigation will be applied to developing more effective methods to reduce Listeria contamination in food packing plants.

The findings will also be of value for plants producing other foods including cold cuts and in relation to recent events, hard-cooked peeled eggs.

*Tan, X. et al. The occurrence of Listeria monocytogenes is associated with built environment microbiota in three tree-fruit processing facilities.  Microbiome. 7: article 115 [2019]



Further Recalls Due to Listeria Contamination

Fresh Location Inc. of Tennessee is recording protein snack trays containing hard cooked peeled eggs distributed widely in the southeast.  The snack trays contain a hard-cooked egg, cheese, grapes and crackers.  The eggs were supplied by the Georgia plant that has been temporarily closed as a result of Listeria contamination detected by traceback from cases in 2017 and 2019.


Since production ceased in the plant during mid-December and products have been recalled, no additional cases of listeriosis have been recorded.


High Plains Farmers Facing Dilemma over 2020 Planting

With no specific details of the Phase-1 agreement with China, farmers are contemplating their selection of crops for 2020.  The trade war seriously impacted soybean acreage harvested down 15.0 percent from 2018 to 75.0 million acres in 2019.  Sorghum was planted on 5.3 million acres down 8 percent from 2018.  Both crops are heavily dependent on imports from China to achieve profitability.  Farmers are anticipating an extension of the Market Facilitation Program that involved transfer of approximately $28 billion from public funds to farmers over 2018 and 2019.  The USDA has yet to decide on future payments but a prominent farmer was quoted as stating, “If the government doesn’t pay us we’re done.” 


According to Reuters, farmers are favoring corn over soybeans with their early seed orders, weary of commitments by China to import soybeans and cognizant of the reduced demand independent of trade disputes following the advent of African swine fever.  China has also reduced imports of cotton from the U.S. and has established alternative suppliers for soybean including Brazil and Argentina. 


Some farmers are evaluating alternatives to corn and soybeans with one Iowa farmer sowing winter wheat and rye.  He was quoted by Reuters as stating, “The agriculture system is completely broken because of the trade war, severe weather, and mounting farm debt.  We just have to farm smarter.”


AI Expands in Poland

Following reports of H5N8 strain avian influenza in turkeys, authorities in Poland have diagnosed the same strain in egg producing flocks.  In addition to a farm close to the turkey outbreaks, chickens have been affected in the Lubelskie, and Wielkopolskie regions.  It is apparent that there is a high concentration of poultry farms in the Lubelskie region with the prospect of further cases emerging.


Biosecurity has been intensified but given the season and previous history, further outbreaks can be expected if migratory waterfowl are shedding the virus.


Unlike previous years outbreaks in 2020 involve H5N8 strain that is potentially transmissible to humans under conditions that have not been clearly defined.


Darling Ingredients Acquires EnviroFlight

Darling Ingredients acquired the 50 percent interest in EnviroFlight owned by Intrexon Corp. thereby becoming the sole owner. EnviroFlight developed technology to rear black soldier-fly (Hermetia illucens) larvae on a commercial scale.  The Maysville, KY plant can produce 900 tons of dried larvae annually.  Although EnviroFlight has demonstrated the nutritional value and safety of its product it is yet to attain approval from regulatory agencies to include the ingredient in animal feed.


Commenting on the acquisition, Russ Randall C. Stuewe, CEO of Darling Ingredients stated, “Our purpose is to repurpose and grow for specialty feed ingredients to produce more useable protein compared to algae and conventional crops.”

Dr. Liz Koutsos, president of EnviroFlight noted, “We have focused on driving necessary changes in the global food supply chain to meet the demands of growing population and we look forward to working more closely with Darling Ingredients to realize the considerable promise of insect bioconversion.”


China Central Bank Boosting Economy

On New Year’s Day the Central Bank of China announced that bank holdings would be relaxed and the Institution released $115 billion in funding for industrial enterprises.  The move by the Central Bank follows a call for support by Premier Li Keqiang.  Economists note that there is a seasonal requirement for liquidity prior to the Lunar New Year holiday commencing on January 25th.


The relaxation of bank reserves and release of liquidity probably reflects a declining economy especially affecting housing and construction.  The increased availability of funds will definitely benefit state-owned construction companies since lower rates will improve returns.


The action by the Central Bank represents a confirmation of a major complaint by the U.S. and the E.U. that quasi-government enterprises in China receive support to the detriment of companies in nations with free-market economies.

Central Bank of China


China Central Bank Discount Rate 2008 - present


Further Information on Wuhan Coronavirus Outbreak

Science posted an interview with Dr. Xu Jianguo, head of an evaluation committee advising the Government of China on the recent coronavirus outbreak in the city of Wuhan.

According to Dr. Xu, a new coronavirus distinct from those responsible for SARS and MERS was isolated from 15 out of 34 patients with clinical signs of pneumonia and respiratory distress.  The original presumptive total of 59 patients was based on clinical evaluation. 


The World Health organization has requested sequence data for the new coronavirus strain. This information would be applied to expedite the preparation of diagnostic reagents required if the infection extends from the present focus.  Although the government of China has in this instance demonstrated transparency, a decision to release sequence data will be the responsibility of the directorship of the Chinese Center for Disease Control and Prevention.  The head of the Institute Dr. George Gao has not responded to requests concerning release of data.


Epidemiologists have not identified the source of the coronavirus that has characteristics similar to viruses isolated from bats.  The Wuhan Market implicated in the outbreak is still closed, although the status of the seafood, animals, reptiles and other food delicacies is unknown.


At this time, it appears that the Wuhan coronavirus outbreak is limited in geographic and temporal extent.  This said, authorities may be suppressing information especially in view of the fast approaching Lunar New Year holiday commencing January 25th when approximately one quarter of the population of China will be in transit using air travel, buses and especially trains.


The incident is of concern since it is yet another example of a coronavirus of animals becoming adapted to humans.  Fortunately, it does not appear that human-to-human transmission has occurred although contacts of the infected patients have been either quarantined or subject to surveillance.


Extent of Interstate Movement of Fighting Cocks Revealed

Effective December 20th, a Federal law banned organized animal fighting in all states and territories. Since 2007 it has been illegal to transport animals between states or territories for the purpose of fighting.


It now emerges that breeders of fighting cocks in the U.S. are shipping birds to Guam and Puerto Rico where cockfighting is prevalent.


The Animal Wellness Foundation documented 500 illegal shipments of fighting birds to Guam involving 9,000 birds in a 33 month period. Birds were shipped by 71 consigners located in Oklahoma, California, Hawaii, North Carolina, and Alabama. The top five shippers apparently accounted for 50 percent of the consignments.


The scope and frequency of shipments as documented, confirm the magnitude of cockfighting in the U.S. with attendant risks to the poultry industry. Apart from the welfare and moral issue of cockfighting, shipment of birds across state lines into territories, and more importantly, the reverse, provides opportunities to transmit both catastrophic and erosive diseases.


Pressure is now being placed on the Governor of Guam to take action in compliance with Federal law.


Position Announcement

PMSI, a member Company of the Big Dutchman Group and a leader in electronic control and monitoring installations has a vacancy for a Sales Account Manager for the region West of the Rockies in the U.S. and Canada. 


The successful candidates should have appropriate technical and sales experience and will be required to reside in the region and travel to existing and potential clients.


PMSI offers a competitive salary and benefits and is an Equal Opportunity Employer


Applications with a detailed CV should be addressed to <HR@pmsi.cc>


NPIP 45th Biennial Conference

According to a circular from Dr. Elena Behnke, Senior Coordinator of the National Poultry Improvement Plan, the 45th NPIP Biennial Conference will be held in Providence, RI. August 25th to 27th 2020.  Registration for the Conference is now open by accessing <www.poultryimprovement.org> “Biennial Conference 2020.”  The Biennial Conference tab includes instructions for submission of proposals and registration and hotel information.











An informal Stakeholder Meeting will take place at IPPE on Wednesday, January 29, 2020 from 09h00 to 11h00 in Room C208 of the GWCC.


Walmart Indian Subsidiary Facing Antitrust Probe

Flipkart Purchased by Walmart for $16 billion in 2018 is the subject of a probe by the Competition Commission of India.

The Government of India has initiated action against both Amazon.com Inc. and Flipkart claiming violation of competition laws that were enacted after the Walmart purchase preventing direct sale to consumers.

The Government is blatantly protectionist with respect to local on-line retailers that now have advantages against competition from foreign-owned competitors. In 2018 Google was fined $19 million for an alleged abuse of competition rules.

Despite the expectations for a rational market with the advent of Prime Minister Narendra Modi the reality is that India remains an inhospitable environment for foreign investors given the socialist-inclined bureaucracy, inherent xenophobia and a chaotic and corrupt legal system.


Flipkart Fulfillment Center



Supermarket Chains Investing in Technology

In order to implement effective click-and-collect and curbside pickup programs, supermarkets are adopting packaged technology from specialist developers.


Lowes’ Foods has partnered with Radius Networks for the FlyBuy Pickup Service using proprietary AI technology. FlyBuy Pickup allows customers to communicate with the store to facilitate collection. Shoppers are notified when an order is ready and customers can indicate their proximity to a store and the time to collect an order.


Jeff Baskin, Executive VP of Global Partnerships at Radius Networks, noted “Our goal at Radius Networks is to help our partners improve the customer and staff experience with the growth of click-and-collect programs.” He added “We have built our solution to provide customers with location updates along their journey and provide accurate updates to Lowes’ Foods so that they can be as efficient as possible.” 


It is understood that H-E-B and Whole Foods have similar efficient systems limiting customer waiting time. 


Weis Markets and Brookshire Grocery Company have established relationships with Mercatus to improve online grocery shopping. The Mercatus Aisle One system has designed a “personalization intelligence engine” to analyze customer data including dietary preferences and demographics, providing services to the shopper. There are obvious advantages to Weis and Brookshire, who operate a Mercatus integrated commerce platform. Aisle One will be integrated to achieve faster check-out and make more optimal a use of in-store associates preparing orders. It is noted that Savemart, WinCo Foods, Piggly Wiggly, and Giant Tiger use the Mercatus E-commerce platform.


It is evident that to be successful in the retail food market, supermarket chains have to provide superlative service on multiple levels. This requires the application of advanced technology including remote sensing and robotics but with integration of systems that benefit the chain


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Dr. Simon M. Shane
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