Weekly News Update
Published: Friday, December 01, 2000
USDA Releases National Organic Standards
USDA on Dec. 20 released its national organic standards, which took 10 years to develop. The standards, which will allow qualifying foods to display the official ""USDA Organic"" seal, replaces an array of inconsistent state standards with ones that regulate organic products marketed in the United States. According to Agriculture Secretary Dan Glickman, the new standards are ""the strictest, most comprehensive organic standards in the world.""
In a conference call hosted by the Greenfield, Mass.-based Organic Trade Association (OTA), OTA Executive Director Katherine DiMatteo called the 554-page rule ""an acceptable document"" that addresses many of the comments submitted by the organization. Changes to the rules include a requirement that products labeled as ""USDA Organic"" must consist of at least 70 percent certified-organic ingredients and the allowance of wine containing sulfites to carry a label saying it’s made with organic grapes.
DiMatteo says she believes USDA has done a great job of tightening up the rule so ""the gaps have been closed."" However, she added, the standards couldn’t address all of the organic industry’s questions and concerns because general counsel and other agencies wouldn’t allow some issues to be addressed.
According to DiMatteo, USDA will ask for public comment on how to enforce a rule that requires companies to use organic ingredients, if commercially available, in organic products. Additionally, OTA says that companies will not be allowed to use the USDA seal until an 18-month implementation period has passed. To view the organic standards in their entirety, visit www.ams.usda.gov/nop.
Hauser to Divest its Technical Services Business
Herbal extracts maker Hauser Inc. (HAUS) on Dec. 18 announced plans to sell its Technical Services division, which consists of both Hauser and Shuster Laboratories. Located in Boulder, Colo., Hauser Laboratories performs analytical testing, chemical synthesis and process development, while Canton, Mass.-based Shuster Laboratories specializes in product development, laboratory testing and claims validation. The sale will allow Hauser to focus its resources on the production and sale of bulk products and the distribution of chemicals to dietary supplements manufacturers, said HAUS President and CEO Kenneth Cleveland in a company release. According to Suzanne Brink, HAUS’ investor relations manager, the company has been in discussions with several potential buyers and is trying to recruit more. Brink wouldn’t disclose the company’s asking price but did say it hopes to sell the division as soon as possible. HAUS on Dec. 20 closed at $.50/share.
Vitamin Shoppe Industries Offers to Buy Out VitaminShoppe.com
VitaminShoppe.com (VSHP) on Dec. 19 said that its majority shareholder, North Bergen, N.J.-based Vitamin Shoppe Industries, owner of 64 percent of VSHP’s outstanding stock, has offered to buy all of the e-tailer’s outstanding shares for $1/share in cash. The proposal is subject to the approval of a special committee that’s not affiliated with Vitamin Shoppe Industries and appointed by VSHP’s board of directors to handle the offer. It’s also subject to the favorable opinion of an independent financial advisor that the transaction is fair to VSHP shareholders, and to the consent of Vitamin Shoppe Industries’ lenders. If approved, VSHP shareholders other than Vitamin Shoppe Industries would receive $1/share. There is no word as to when VitaminShoppe.com is expected to accept or reject the offer.
Twinlab to Cut Workforce, Take 4Q Charge
In an effort to increase efficiencies and reduce overhead costs, Twinlab Corp. (TWLB) on Dec. 19 announced that it will terminate 12 percent of its 1,200-person workforce, resulting in a 4Q00 charge of about $500,000. The company will also streamline and consolidate its operations and administration within its direct-to-consumer channel, which includes its Bronson catalog and Changes direct-selling unit. TWLB President and CEO Ross Blechman said the company designed the plan to capitalize on the strength of the Twinlab brand and its premium products.
U.S. Biotech Committee, EU Recommend Mandatory Labeling for GE Foods
In a 19-page report issued Dec. 19, a 20-member biotechnology committee formed by the Clinton administration and the European Union (EU), recommended that the U.S. and Europe set content-based mandatory labeling requirements for foods that contain genetically engineered (GE) ingredients. According to the committee, consumers have a right to choose the items they want to consume. Although it’s not in favor of banning GE foods altogether, the committee says that biotech products shouldn’t be allowed on the market until they’re approved by the government.
Briefly:
Gardenburger (GBUR) announced it has stopped using genetically engineered soy in its meat alternative products.
Drugstore.com (DSCM) on Dec. 18 announced that during a recent week the company shipped roughly the same volume of holiday store products as it shipped during last year’s entire holiday season.
Concord, Mass-based MotherNature.com on Dec. 18 said that it anticipates making an initial distribution of liquidated proceeds of about $.85/common share for a total distribution of approximately $13.4 million on Dec. 30. The money will be paid to shareholders-of-record as of Dec. 27.
In what it says broadens its investments in the healthy living category, Greenwich, Conn.-based North Castle Partners and Boston-based J.W. Childs Associates have acquired New York Equinox Fitness Clubs, operator of high-end clubs and spas.
FDA is extending its comment period for the draft guidance on botanical drug products originally published in an August issue of the Federal Register. Written comments will be accepted until March 15, 2001. Send them to: Dockets Management Branch (HFA-305), FDA, 5630 Fishers Lane, Room 1061, Rockville, Md. 20852.
Bastyr University founder Joseph Pizzorno, N.D., has been appointed to the White House Commission on Complementary and Alternative Medicine. He is the first naturopathic doctor to join the commission.
Chairman of the House Committee on Government Reform Rep. Dan Burton, R-Ind., has scheduled a hearing on ephedra for Dec. 27. For more information, visit www.house.gov/reform.