U.S. Spends Millions on Grants to Corporate Giants : Promotion: Dozens of well-known firms have collected money under a USDA program to find new overseas markets for American goods.
McDonald’s got $465,000 from the Agriculture Department last year for ads, paper tray liners and counter displays promoting Chicken McNuggets to customers around the world.
Campbell Soup Co. spent part of the $450,000 it got from the government to remind the people of Japan, Korea, Argentina and Taiwan to have a V8 juice. Joseph E. Seagram and Sons touted its Four Roses bourbon in Europe and the Far East with $146,000 from the department.
The three companies are among dozens of well-known corporate giants that have collected money under a USDA program to find new overseas markets for American food, candy, bourbon, wine, ginseng, cotton, mink pelts and bovine semen.
Some of the companies get millions of dollars a year, according to documents obtained by the Associated Press through the Freedom of Information Act.
The $200-million-a-year Market Promotion Program is supposed to help American farmers by promoting exports of products that contain at least 50% U.S. agricultural commodities.
Two-thirds of the grants in 1991 went to industry associations that conduct generic promotions for products such as strawberries, kiwis or cling peaches.
The rest went to a long list of companies to advertise their brand-name products. Those brands include Burger King, M&M-Mars; and Hershey Foods, Del Monte, Welch’s and Ocean Spray Cranberries, Nabisco and Quaker Oats.
The amounts last year ranged from as little as $237 to the millions.
Pillsbury got $2.9 million to promote processed corn, Sunkist Growers won nearly $10 million to promote citrus, Gallo got about $5 million, and Dole--Dole Fresh Fruit, Dole Dried Fruit and Nut Co. and Dole Citrus--collected a total of about $3 million.
Critics question why companies with substantial advertising budgets are getting thousands of dollars from the government for promotions they would likely conduct anyway.
“This is a classic example of welfare for the rich in the worst possible way,” said Rep. Dick Armey (R-Tex.). “You go down the list of companies and it’s hard to imagine they need a handout from the American taxpayer to market their products abroad. If McDonald’s needs help in marketing . . . we are in sad shape in this country.”
“Who says the budget can’t be cut?” added David Keating, executive vice president of the National Taxpayers Union. “Look here--there’s too much pork, fat and sugar. It’s a complete waste.”
And Rod Leonard, executive director of the Community Nutrition Institute, said a company’s decision to enter an overseas foreign market “never rests on whether they’re able to extort a subsidy from the federal government.”
“It’s not an export promotion program, it’s a pass-out-the-goodies program, and you have to be a big corporation to get a piece of it,” he said.
A spokesman for Campbell Soup Co. said company officials believe that the program has helped sell more juice and soup abroad.
“It enables us to ship products we might not otherwise be able to market,” said Jim Moran from the company’s headquarters in Camden, N.J. “The name Campbell has virtually no brand recognition overseas, and this gives us the opportunity to get some brand recognition we might not otherwise get.”
And since there is so much food on grocery store shelves, he said, advertising is critical because customers tend to buy the brands they know.
Steve Censky, associate administrator of the USDA’s Foreign Agricultural Service, said the brand-name promotions were required by Congress in the 1990 farm bill.
Under the Market Promotion Program, industry associations generally apply for funding and then can either use the money for generic promotions or divide it among various companies, which then promote their own labels. The Agriculture Department must approve each spending plan. Companies can also apply directly if there is no industry association.
McDonald’s, which had annual sales of $20 billion last year, received the government money through the U.S. Poultry and Egg Export Council. The money was used for advertising, tray liners and counter displays to promote Chicken McNuggets, Censky said.
“They (the industry) are interested in increasing U.S. poultry sales overseas and they see this as a good way to expand such sales,” he said.
Mike Gordon, director of international communications at McDonald’s, said the company isn’t a major participant in the program because many of its 3,000 overseas restaurants are supplied locally.
“The dollars we receive are used directly to promote U.S. poultry, only in those specific instances where we are using U.S. poultry,” Gordon said. “These dollars are used directly for helping create markets and generate awareness for American goods abroad.”
