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Hundreds of Convenience Stores Risk Losing Food Stamp Customers With PM-Food Stamps and

December 1, 1992

Hundreds of Convenience Stores Risk Losing Food Stamp Customers With PM-Food Stamps and PM-Food Stamps-States

WASHINGTON (AP) _ Many inner-city residents may no longer be able to use food stamps at neighborhood convenience stores, often the only nearby source for groceries, because of federal concerns that some stores are selling more candy and soda than bread and milk.

An Agriculture Department review of retailers that accept food stamps has found nearly 900 small grocers are in jeopardy of being kicked out of the program for not selling enough staple foods to stamp users.

Many more stores may be at risk as the two-year review, begun earlier this year, continues into 1993, industry officials said Monday. Most of the threatened stores are in inner-city neighborhoods abandoned by big grocery store chains. But convenience stores in rural areas and some suburbs also are under the gun.

Food stamps represent big money for the nation’s 70,000 convenience stores, accounting for 4 percent of $40.1 billion in sales last year.

More than one in 10 Americans now receives food stamps - a record 26.43 million were on the rolls in September. And many low-income Americans are forced to do their grocery shopping at convenience stores.

Rep. Tony P. Hall, chairman of the House Select Committee on Hunger, said in a recent hearing that there has been a mass exodus of supermarkets from many inner cities.

″The situation for food stamp recipients in the cities is difficult enough,″ said Hall, D-Ohio. ″Local markets are often the only place were these people can buy food. I don’t know where they will get their next meal if these markets loose their food stamp certification.″

Industry sources say USDA has letters ready to be mailed to some 900 stores notifying them that they may no longer accept food stamps because their sales volume does not meet legal requirements.

A convenience store in rural Nebraska already has received such a notice, Teri Richman, senior vice president for public affairs with the National Association for Convenience Stores, said Monday. Richman was not able to say immediately where the store was located.

Under the law, 50 percent of a store’s ″food-stamp eligible″ food sales must be in staple items for home preparation and consumption, such as bread, milk, meat and cereals.

The balance of a store’s food volume may come from sales of ″accessory″ foods such as coffee, tea and cocoa, candy, condiments, spices and carbonated beverages, including fountain drinks. All can be purchased with food stamps.

Ineligible items include alcoholic beverages, tobacco or hot foods ready for home consumption.

Many of the 900 convenience stores are in trouble now, a decade after USDA’s last nationwide review of retailers that accept food stamps, because of an explosion in fountain drink sales, Richman said.

The Nebraska store, for example, has about 48 percent of its sales in staple foods if fountain drinks are included in the calculations. Take them out and the store’s staple food sales account for 57 percent of the eligible food volume.

A chain in Texas did its own study and figured that of 140 stores in the state, only six would be allowed to accept food stamps if fountain drink sales were counted, Richman said.

The industry has asked USDA not to revoke food stamp licenses as it works with Congress and the department to resolve the issue. Declaring fountain drinks an ″ineligible″ food is one option.

But Andrew P. Hornsby Jr., deputy administrator for food stamps with the Food and Nutrition Service, told Richman in a Nov. 18 letter obtained by The Associated Press that USDA believes its interpretation of the law on fountain drinks is ″appropriate and reasonable.″

If fountain drinks were declared an ineligible food, Hornsby argued, many other items could also follow: ice cream cones, candy bars, individual packages of chips, crackers or pastries.

Food and Nutrition Service spokesman Dick Thaxton said in an interview Monday that the matter was still under review. The agency has asked USDA’s attorneys and the secretary’s office to look into the situation.

″It is a quandary, but we will work our way out of it,″ Thaxton said. ″We’re taking a prudent look at how we handle this.″

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