5. Costco Flattens Coke
NEW YORK (
) -- Sorry,
customers. No Coke,
Costco confirmed Monday that it ceased carrying
products due to a pricing dispute with the beverage maker. The wholesale club operator, which operates about 560 warehouses in the U.S. and abroad, said on its Web site that it will not remove bottles of Coke and Diet Coke currently displayed on its store shelves, but does not plan to restock them "until the matter is resolved."
Coca-Cola Co. refused to comment on the squabble, other than calling Costco an important customer and saying it will work with them "in a spirit of fairness."
Essentially, the Coke/Costco rift is a function of the recession. Strapped shoppers are pushing retailers to lower prices, while product makers like Coca-Cola are straining to maintain margins. What gives this particular fight some additional fizz is that it is being waged by an upstart retailer against one of the world's most heavyweight brands. And judging from the signs on Costco's shelves and site, they don't believe they are fighting above their weight class.
"Costco is committed to carrying name brand merchandise at the best possible prices. At this time, Coca-Cola has not provided Costco with competitive pricing, so that we may pass along the value our members deserve," said a message on the company's Web site, labeled "Price Alert!"
We here at the Five Dumbest Lab just hope both sides settle this silly beverage battle as quickly and amicably as possible. So when times get better they can go back to their normal practice of overcharging consumers for syrup, sugar and seltzer.
Dumb-o-meter score: 75 -- Our favorite soda? Dr. Brown's Cel-Ray Tonic! Can't beat that celery flavor
4. Genentech Speaks Washington's Language
The nation's hardworking public servants in Congress are really speaking
We aren't kidding you. They literally are.
According to the
New York Times
, lobbyists working for the biotech company, now a part of Swiss drugmaker
, penned statements for more than a dozen representatives during debate over the health care bill earlier this year. The statements ultimately ended up in the House's official record.
The Times estimates that 42 House members picked up some of Genentech's talking points, including 22 Republicans and 20 Democrats. So at least the company was bipartisan in its ghostwriting.
Or, more likely, they were just covering all their bases.
Either way, emails uncovered by the
show that the Congressional statements were based on information sent from Genentech employees to the company's lobbyists. Those very same lobbyists, of course, are no strangers to lawmakers on Capitol Hill. Genentech's political action committee and Roche have made contributions to House members, including some that have filed statements in the Congressional Record. Evan Morris, head of Genentech's Washington office, told the
there was no link between the contributions and the statements.
Yeah, right. And we have a monument to sell you in Washington.
"I regret that the language was the same. I did not know it was," Rep. Bill Pascrell Jr., (D., N.J.) told the
, adding that he said he got his statement from his staff and "did not know where they got the information from."
Well, now you know, congressman. And so do we.
Dumb-o-meter score: 80 -- It may have been profane at times, but at least the yelling in the Town Halls this summer was authentic.
3. GM's Payback Jive
Thanks for nothing,
General Motors said Monday it lost $1.2 billion from the time it left bankruptcy protection through Sept. 30. While that may seem like less than celebratory news, it was a much improved figure from previous quarters. In fact, performance at General Motors was so much better than anticipated that the auto giant also proudly boasted it will begin repaying $6.7 billion in U.S. government loans starting with a $1.2 billion payment in December.
And wait, there's more! GM intends to repay the entire debt over the next eight quarters, but could pay the full amount back to Uncle Sam as early as next year, if things go smoothly.
"We have significantly more work to do, but today's results provide evidence of the solid foundation we are building for the new GM," CEO Fritz Henderson said in a statement.
Hooray! The taxpayer is finally getting money back from GM -- and maybe earlier than planned. Sounds like great news to us.
Not so fast, Fritz. There is a catch. The money being returned is coming from GM's rainy day fund set up by the government.
You see, GM entered bankruptcy protection with roughly $94.7 billion in debt. It emerged with $17 billion, including the $6.7 billion owed to the U.S. government. The government has given GM a total of $52 billion, including $45.3 billion in exchange for a 61% equity stake in the company.
GM CFO Ray Young, who is now in the process of being replaced as GM's top money man, said the government placed $16.4 billion of GM's loan money into a contingency fund as a precaution against falling sales or some other problem.
So in other words, the government is getting back GM's rainy day money even though the automaker is still drowning in red ink.
Dumb-o-meter score: 85 - That's kind of like robbing Peter to pay Peter, isn't it?
2. The (Double) Cheeseburger Rebellion
Watch your neck, your highness. There's revolution in the air at
In a letter to Burger King's board dated Nov. 11, but released this week, a group representing hundreds of franchisees attacked management for its "ill-conceived" decisions that they say could endanger their businesses.
What sparked this uprising among the King's once-loyal minions? A $1 double cheeseburger promotion forced on them after they voted against it two times. While costs vary by location, the $1 double cheeseburger typically costs franchisees at least $1.10. Hence, franchisees sued management over the matter earlier this month in a case still unresolved.
The band of disenfranchised franchisees also criticized an earlier corporate decision to snatch back millions of dollars in rebates distributed to franchise owners from soft drink companies.
Why should Burger King's management take this threat seriously? Because franchise owners operate approximately 90% of the company's 12,000 locations so they have a lot of sway with the board and the big cheese himself, CEO John Chidsey. Moreover, the board is already hearing from restless shareholders over its company's dismal stock performance, down 11% over the last year, vs.
, which is up 13%.
"We feel this is a very sad time for the Burger King brand," according to the letter from the National Franchisee Association.
Burger King spokeswoman Denise Wilson, on the other hand, said the company's actions and its $1 double cheeseburger offer are in the best interest of its franchisees.
"BKC takes great pride in our franchise system and the actions we have taken to enhance our competitive position," she said in a statement Tuesday evening.
Clearly these two sides have a long way to go before they meat -- we mean meet -- in the middle and save the kingdom from total collapse.
Dumb-o-meter score: 90 -- Where's the beef? Just ask the Burger King franchise association. They've got a big one!
1. Kellogg Waffles on Eggos
Imagine Kleenex announcing a shortage of tissues? Or Jell-O rationing pudding? Well, that nightmare has become a reality for
Yep, they are running out of Eggos.
Kellogg said this week that the supply of its popular Eggo frozen waffles is dwindling as a result of production interruptions at two of its four Eggo plants. Kellogg's Atlanta plant was shut down in September after a series of storms caused extensive flooding in the area. Several production lines at the company's Rossville, Tenn. bakery are closed indefinitely for repairs, according to the company spokeswoman Kris Charles.
The remaining -- and functioning -- Eggo plants are located in San Jose, Calif., and Blue Anchor, N.J. Not until the middle of 2010 will grocery store shelves around the country be stocked at pre-shutdown levels, Charles said in an email to the
"We are working around the clock to restore Eggo store inventories to normal levels as quickly as possible," wrote Charles.
Seems to us like the company should have had a backup plan for one of its most famous and profitable products. Right now the company is running the risk that consumers will simply "Leggo" of their Eggos and switch to another brand of waffle upon visiting the freezer aisle.
Our solution is for Kellogg to hand over waffle production to its
division. You know those elves won't miss a shipment.
Dumb-o-meter score: 95 -- Then again, elves are awfully busy this time of year.
-- Written by Gregg Greenberg in New York
Before joining TheStreet.com, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.