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Amid Government Shutdown, NAMA Public Policy Confab Is Hailed A Success; Coinage Change Looms, Could Cost Operators $500+ Million

Posted On: 10/10/2013

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TAGS: vending industry, National Automatic Merchandising Association, NAMA Public Policy Conference, Pete Tullio, World Wide Vending, Gourmet Coffee Service, healthy vending, micro market, office coffee service, Rod Nester, Smith Vending Corp., Concurrent Technologies Corp., Cents and Sensibility, U.S. coin content

WASHINGTON -- Some 50 vending industry members took part in the National Automatic Merchandising Association's Public Policy Conference this week in the nation's capital.

This year's conference was held amid quarrelling between Democrats and Republicans over fiscal issues. The federal government has been shut down since Oct. 1, after its spending authority expired. The U.S. Treasury estimates that by Oct. 17 it will be low on cash because a federal debt ceiling prevents it from borrowing more.

Despite this awkward timing, NAMA chairman Pete Tullio, World Wide Vending and Gourmet Coffee Service (Van Nuys, CA), called this year's government relations summit the most successful yet. This is the fourth consecutive year that NAMA organized an industry advocacy mission.

Hesch, Tullio, Dieffenbach Meetings were held with dozens of House and Senate members, including Reps. Candice Miller (R-MI), Jackie Speier (D-CA), John Lewis (D-GA), Tom Price (R-GA) and Spencer Bachus (R-AL), along with Sens. Tim Scott (R-SC) and Roy Blunt (MO). Tullio had met with Tony Cardenas, a Democrat who represents the 29th district (San Fernando Valley), where the operator is based. "He's sympathetic to the industry's challenges," Tullio said. As a result of the meeting, Cardenas has scheduled a visit to World Wide Vending's office in Van Nuys.

PHOTO:Vending industry associates, from left, are Craig Hesch of A.H. Management Group Inc., Pete Tullio of World Wide Vending and Gourmet Coffee Service and Mark Dieffenbach of Hershey. Tullio is NAMA's chairman, and Hesch and Dieffenbach are past chairmen.


While some meetings with agencies were canceled due to the shutdown, including one on healthy vending with the Department of Health and Human Services, NAMA officials were able to meet with the Department of Defense and the Mint. At the Defense Department, "healthy" vending on military bases is a big concern. At the Mint, discussions were focused on the effects on vending of changing the metallic composition of coins.


On the topic of healthy vending, Rod Nester of Smith Vending Corp. (Clarinda, IA), part of the Canteen network, told VT that lawmakers and agency officials were eager to learn about micromarkets and their ability to offer wider food selections.

VT also spoke with Craig Hesch of A.H. Management Group Inc. (Rolling Meadows, IL), who, along with Nester and Tullio, is very concerned about the "Cents and Sensibility Act" (H.R. 1719). They were among several operators who met with U.S. Mint officials on Oct. 8 to discuss how changing the metallic composition of circulating coins will impact vending operators. The act is designed to save American taxpayers money by reengineering 1¢, 5¢, 10¢ and 25¢ coins for more economical production.

Hesch, a past NAMA chairman who in 2010 testified before members of Congress that any modifications to coins or paper currency would cost the vending industry more than $530 million, restated that concern at the Mint this week. "They did not consider what the cost and time involved would be for vending to accept two different types of coins of the same denomination," Hesch said.

The Mint has been conducting a study on new coin content. It was originally supposed to present its findings to Congress in December 2012, but the Treasury determined that more testing was needed. Results of the study will now be presented in June 2014.

The U.S. Mint assembled an R&D laboratory within the Philadelphia Mint with Concurrent Technologies Corp., an independent scientific research firm overseeing the study. Tests were conducted for hardness, ductility, weight, color, surface finish, "coinability," corrosion and wear resistance, electromagnetic signature (for vending machine capability), supply chain availability and cost.

Of the 80 metals on the periodic table of elements, only aluminum, zinc, lead and iron (used to make steel) cost less than copper and nickel, the primary metals for today's U.S. coins, according CTC. The research focused solely on alloys and plated metals using aluminum, steel, zinc, copper and nickel.

With the exception of the penny, replicating the electromagnetic signature for the remaining denominations proved challenging, with all tested compositions demonstrating the electromagnetic signature of copper, according to early studies. CTC estimated that retrofitting vending machines to accept coins with new electromagnetic signatures would cost vending operators between $380 million and $630 million.

CTC also found that the current electromagnetic signature could be maintained with a slight reduction in nickel content, but cost savings would be minimal.

"Turning the nickel into steel will be very expensive for vending operators, and other industries," Tullio said. "In the end, the Mint might only save taxpayers $40 million."

NAMA, vending
PHOTO: About 50 vending industry members took part in the National Automatic Merchandising Association's Public Policy Conference in the nation's capital.