From the desk of the ALA President 9/16

ALA’s annual conference is going virtual.  It’s not as good as seeing each other in person but it’s the next best thing.  Plans are underway to have ALA’s annual conference on October 19 and 20.  Agenda, registration and details on in the works. All of the moving parts of this business will be highlighted by speakers from resale agencies, the Administration, Congress and industry.

Hurricane shutters military bases in Florida panhandle & Gulf coast.  Here we go again.  The Florida panhandle and Gulf coast is a hub for military bases including Naval Air Station Pensacola, Naval Air Station Whiting Field, and Tyndall AFB, Eglin AFB, Hurlburt Field and Keesler AFB.  Exchanges and commissary operations are being affected with closures or curtailed operations and many base residents are being asked to shelter in place and with some bases locked down.

Tyndall AFB was virtually destroyed when it was hit by a hurricane in 2018 that caused $5 billion in damage.   There are some 1,700 coastal military sites worldwide.  The Pentagon has ordered all military services to use a new database for planning and construction that tracks the probability of flooding events.

Bringing it to brink…again.  I reported last week that the Federal government was probably going to be funded with a “continuing resolution” that funds the DoD and other Federal agencies at last year’s levels. It looks like they are going to go right up to the October 1 wire with a bill being placed on the floor of the House of Representatives next week.

Congressional action on resale programs delayed.  I reported last month and now it’s official.  The Congress won’t be moving on the National Defense Authorization Act until after the election.  Several policy issues are being deliberated including resale funding, consolidation of resale programs, and reviews of DeCA business operations.  ALA is working with our Hill contacts to represent industry and patron views.

Military resale and vaccine distribution.  Distributors are stepping forward and ALA is working with the Department of Defense and HHS to examine the feasibility of using the military distribution channel to help get the vaccine to military personnel and others, especially at far-flung areas of the world.  We are citing the regular rhythm of delivers in both chill and frozen as a capability that could aid in the vaccine distribution effort.  HHS and CDC are working to develop a comprehensive pan for vaccine distribution and setting priorities for who gets the vaccine first.  An Army General has been put in charge of Operation Warp Speed, an Administration program to get the vaccine produced and distributed. Commercial retailers are also working with Warp Speed to get the vaccine distributed and administered.

DeCA and industry collaboration accelerates.  Two efforts underscore a renewed effort by DeCA to engage with industry to boost sales and create store excitement.  Next week, ALA will host a series of category reviews and joint business planning sessions.  And, DeCA has announced “top-to-top” reviews with its industry partners to “support a culture of collaboration through proactive collaboration and facilitate the development of sound business objectives,” according to a notice to trade signed by Mike Dowling, DeCA’s Chief Operating Officer.  The reviews will include category insights, performance measures, market competitive data, product innovation and more.  ALA has supported this effort and we look forward to continued renewed efforts to join hands with DeCA and power sales.

VCS getting hit hard by the pandemic—seeking relief.  Of all of the military resale programs, perhaps none has been hit harder by the pandemic than the Veterans Canteen Service with major hits on sales and operations in the VA hospitals due to visitor restrictions and other pandemic prevention measures.  $140 million was included in a version of the Senate pandemic relief measure but the House and Senate are deadlocked on that relief package.  Efforts are underway to have a new vehicle to get needed funding to VCS.  ALA is supporting measures to get relief to VCS in order to avoid furloughs of VCS employees.  If funding relief materializes, it could come in the form of shifting internal VA funding to relieve operations or Congressional Action.

VCS has been heroically maintaining operations at the hospitals in spite of the pandemic restrictions and has been supporting Veterans hospital programs during the Western wildfires and impacts from the 2020 hurricane season.  There is massive precedent for providing this aid.  We are pressing for the same relief for VCS that is being given to DoD non-appropriated fund programs where more than $300 million has been allocated to DoD exchange and MWR programs.  And, ALA is pushing to have all branches of the Armed Services in DoD be supported with funding.  The Navy and Marine Corps leadership has stepped forward with aid and the Army and Air Force is beginning to recognize the need and allocate funding to relieve the plight of exchange and MWR programs caused by the pandemic.

Germans taxing U.S. troops?  Germany has threatened to impose tax penalties on troops and civilians who it says, “have special ties to the country.”  The Germans are arguing that a service member or DoD civilian who extends their rout, marries a local person or does anything else that suggests special ties to Germany could be liable for taxes on all military pay they received while in Germany.  The American government is pushing back citing tax exempt status of the Status of Forces Agreement.

Biden transition team ramping up.  It’s far from over and certainly far from decided but the Biden camp is putting together its transition team anyway.  The team is a mix of left and center with many veterans of the Obama Administration.  Members include: Bob McDonald, former CEO of Proctor and Gamble; and, Jeff Zients, Obama’s National Economic Council Director.  Permanent staff include Cynthia Hogan, a former lobbyist for Apple; and, Jessica Hertz who worked at the Obama Justice Department and was recently a director and associate general counsel at Facebook.  There are about 4,000 political positions that get filled with each incoming administration.

Beer in commissaries review.  Reports are that DeCA and DoD are review the program to sell beer in commissaries to determine whether to continue and expand the program.  Considerations are space and patron demand.  The program was started about two years ago to provide convenience for patrons who are provided with this availability in many off-base grocery stores.  Beer and wine are currently sold in ten commissaries with sales at about $2.5 million.

Best regards,

Stephen Rossetti



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