Thursday, November 23, 2017 | Today's Vending Industry News
Hanging Together

Posted On: 9/27/2013

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TAGS: Vending Times editorial, vending industry, vending editorial, retail automation, vending operator, vending industry history, coin machine, coffee service, food service, Tim Sanford, trade association, jukebox association, coin machine, National Automatic Merchandising Association

Around the turn of the millennium, we offered our opinion that a rather long era of legislative and regulatory tranquility was ending. We observed that new operators never had experienced the kind of political and legal battles that were common in the 1960s and '70s, and that some who had survived those fights had allowed the memory to fade. We urged everyone to become involved in trade organizations, which originally were established by the embattled pioneers when their new industry was beset by governments with an instinctive desire to extract the greatest possible amount of money from it, without ever understanding what it was attempting to do.

And the assault has been renewed, but not in the manner we expected. It is manifesting itself differently in different segments. What is common to most of these initiatives is that they represent an attempt by bands of enthusiasts to win recognition as experts in what is good and bad for everyone else, and then to lobby governments to implement laws and rules that will enforce their likes and dislikes.

During the first phase of the postwar merchandise vending boom, the early adopters found themselves confronted by large levies on their points sale, sometimes rationalized as "inspection fees," but often just per-machine taxes that were not justified at all. This led operators to meet, form trade associations and retain legal counsel.

Fortunately for vending, it already had a national organization experienced in government relations: the National Automatic Merchandising Association, founded in 1936. NAMA offered those new state associations an affiliation program: they could become State Councils of NAMA, and receive administrative assistance in complying with laws governing nonprofit organizations as well as the support of experts in public health, labor law and other disciplines in explaining the industry to state lawmakers and regulators.

This has worked out extremely well. Joint state and national efforts delivering, among many other things, a court decision requiring that a fee levied on a vending operation for "inspection" be proportional to the expense of actually conducting the inspections. At the national level, far-sighted manufacturers and suppliers worked through NAMA to establish the Automatic Merchandising Association Health Industry Council, which set early safety standards for vending machines and laid the groundwork for a very long-lasting relationship with federal agencies, and state and local health authorities, based on good communications and mutual respect. NAMA and its payment system manufacturer members have established a similarly cordial, informed relationship with the Treasury, to minimize disruption when bill and coin designs and compositions change.

With that foundation in place, NAMA was able to serve as a very effective industry advocate during the last upswing in assertive government half a century ago. New federal rules for food preparation and labeling were written with a good understanding of the differences between refrigerated food vending and other kinds of retailing.

This time around, the vending industry has not been made a distinct target, and NAMA can take much of the credit for that. Arguably, the quick-service restaurant segment and large manufacturers of cold drinks and snacks have taken much more abuse than vending operators. But vending has not escaped unharmed -- the calorie reporting requirement slipped into the Affordable Healthcare Act demonstrates that point -- and the fight is by no means over, let alone won. As the industry recovers its momentum through deployment of new technology and innovative marketing programs, it must remain vigilant. Now is the time for operators (and suppliers) to strengthen their ties to NAMA and to state associations.

Other segments have their own histories of effective organization. The then-new jukebox industry established the Music Operators Association (now the Amusement and Music Operators Association) to negotiate a structure for paying recorded-music royalties that everyone could live with, and its early success fueled the swift development and expansion of the jukebox business. Today, operators on the entertainment side are responding to new threats: efforts are underway to reactivate associations in California and Florida. In Tennessee, an existing association persuaded the revenue authorities to treat sales of digital downloading jukebox music and service subscriptions in a fair manner, analogous to other sales taxes. And the Illinois Coin Machine Operators Association has been working steadily for two decades to insure a place at the table when video lottery games become legal.

The French political philosopher and statesman Alexis de Tocqueville observed that democratic countries require private associations to protect the public against tyranny. Without such associations, he warned, "a great people may be oppressed with impunity by a small faction or by a single individual." Tocqueville praised the young United States for its citizens' success at forming such associations, and these industries demonstrate that he knew what he was talking about.