Tray Theft: Legal Options Presentation to the Long Company

1
Tray Theft Legal OptionsPresentation to the
Long Company

• Robb MacKie
• Vice President Government Relations

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Tray Loss Is There a Problem?

• 15 Percent Annual Replacement Prior to 2002
• 30 to 80 Percent Annual Replacement Since 2002
• Problem Areas
• Chicago
• Detroit
• Texas

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Tray Loss Operational Issues

• Lack of Trays for Product
• New Trays Disappear First
• As Many as 3,000 Trays in Single Day
• 150,000 - 300,000 in Annual Budgeted
  Replacement Costs

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• Where are Trays Going?
• Individual Theft
• Retail Bakers and Caterers
• Mixed up with Other Wholesale Bakers
• One Time Event Loss
• Organized Theft Rings

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Tray Loss Contributing Factors

• Lack of Industry Focus and Cooperation
• Lack of Route Sales Accountability
• Lack of Specific Loss Data
• Trays are all Mixed Up
• The Number One Reason
• Its Only a Tray

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Tray Loss Whats Changed?

• Value of Trays has Increased Along with Cost of
  Fuel
• At Some Accounts, Value of Tray Exceeds Value of
  Product in Tray
• Systematic and Organized Effort to Steal and
  Regrind Plastic Trays

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Case Study Detroit, Michigan

• Baking Company Noticed Significant Increase in
  Tray Loss in Detroit Area
• Conducted Audit of Accounts and Tray Loss
• Resulted in Recovering Some Trays
• Enlisted Support of Route Sales Representatives
• Identified Potential Targets of Excessive Losses
• Conducted Surveillance

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Case Study Detroit, Michigan

• Surveillance Showed Organized Effort to Steal All
  Plastic Containers
• Coordinated with State and Local Law Enforcement
  in Arrest
• Overcame Initial Reluctance by Law Enforcement
• Discovered Major Recycling Operation
• 20 Arrests
• 10 Trucks
• 2 Warehouses Seized
• All of Operations Equipment Stolen

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Case Study Detroit, Michigan

• Postscript
• Major Operation Disrupted Using Organized Crime
  Laws
• 12 18 Months
• One of 4 or 5 Operations in Detroit Area
• Resulted in Decrease in Tray Losses
• All Plastics Targeted
• Bakery
• Beverage
• Auto Makers

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Case Study Detroit, Michigan

• Value of Plastic Recycled
• 20 Million per Year!!!
• 45 Baking Industry Equipment
• Source Wayne County Prosecutor's Office

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Motivations for Organized Recycling Operations

• No Overhead
• No Industry or Law Enforcement Attention
• Misdemeanor Theft No Deterrent
• Free Money With Little Risk

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Legal Options

• Misdemeanor Theft Prosecution Unproductive
• Pursuing Felony Property Theft More Productive
• Requires Prosecutor Buy-in
• Pursuing Organized Racketeering Crime
  Prosecutions Most Productive
• Requires More Time and Resources
• Requires Prosecutor Buy-in Easier Sell
• Allows Asset Seizure

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Keys to Success

• Accurate Assessment of Problem and Theft Exposure
• Industry Cooperation Critical
• Information and Resource Sharing
• Tray Exchanges to Reduce Competitor Tray
  Inventory
• Close Cooperation with Law Enforcement and
  Prosecutors
• Use Trained Professionals to Conduct
  Investigations
• Require Plastic Suppliers to Reject Recycled
  Plastic from Questionable Sources

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ABA Taking the Lead in Battling Tray Loss

• ABAs Fleet and Distribution Committee
  Establishes Tray Loss Task Force
• Identifying Issues and Potential Strategies
• Industry Survey
• Coordinating Industry Response
• Developing Educational Materials
• Route Sales Representatives
• Customers
• Reaching Out to Potential Partners
• Exploring Promising Technology
• WalMart RFID Project

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Will the Baking Industry Respond?

• Can the Baking Industry Afford Not to Respond?

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Thank you.