Calif. Retailers and Law Enforcement to Combat Organized Retail Theft Epidemic

LOS ANGELES -- Nearly 300 retail industry executives, store owners, law enforcement personnel, lawmakers, and prosecutors met here yesterday in a united effort to curb the $34 billion problem of organized retail theft, also known as ORT.

The one-day seminar, co-hosted by the California Grocers Association and the California Retailers Association, examined the ORT crisis and how it impacts retail industry and law enforcement. Speakers included retailers, law enforcement, and local district attorneys who provided information on how theft rings operate and what retailers and law enforcement can do to deter their activities.

"Organized retail theft has become an epidemic throughout the United States, affecting a wide range of retail establishments, including supermarkets, chain drug stores, independent pharmacies, mass merchandisers, convenience stores, and discount operations," said CGA president Peter Larkin. "This seminar is a first step in bringing all elements involved in fighting ORT to one place to learn and network. We hope this is just the beginning."

CGA and CRA are exploring legislative and regulatory solutions to this escalating security problem. In addition, the associations are looking for ways to work with local and county governments to address this issue.

ORT losses are estimated to run as high as $34 billion annually across all retail channels nationally and involve professional theft rings that move quickly from community to community and across state lines to steal large amounts of everyday household commodities and consumer items that are then repackaged and sold back into the marketplace through fencing operations, flea markets, swap meets, and questionable store-front operations, he added.

"These are not simple shoplifters," Larkin said. "They are highly organized, very aggressive theft rings that steal high-dollar items in large volume."

High demand items include over-the-counter (OTC) drug products, such as analgesics and cough and cold medications, razor blades, camera film, batteries, videos, DVDs, CDs, smoking cessation products, and infant formula.

According to CGA, ORT has a direct impact on consumers by compromising product integrity and driving up product costs. In addition, state and local governments are losing millions of dollars in tax revenue.

In addition, stolen OTC drug items and infant formula are not kept under ideal or required storage conditions, which affects nutrient content and physical appearance. Expiration dates, lot numbers and labels are often altered -- falsely extending the product's shelf life and disguising the fact it's stolen. Cough and cold products frequently are sold to clandestine methamphetamine labs.

ORT is now the second highest domestic priority for the Federal Bureau of Investigation (FBI) given its concerns that such activity may help fund terrorism.

In December, Congress passed legislation calling for the Attorney General to establish an ORT Task Force within the FBI to work closely with the retail community on creating a national database or clearinghouse to be housed in the private sector and help identify where ORT crimes are being committed. This information will help the FBI quickly identify "hot spots" throughout the United States so it can deploy agents and resources more efficiently.

CGA represents approximately 500 retail members operating over 6,000 food stores in California and Nevada, and approximately 200 grocery supplier companies. Retail membership includes chain and independent supermarkets, convenience stores, and mass merchandisers.
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