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60
SH A R E H O L D E R P R O P O S A L
( I T E M N O. 6 )
We฀ have฀ been฀ notified฀ by฀ one฀ shareholder,฀ the฀ name฀ and฀ shareholdings฀ of฀ which฀ will฀ be฀ furnished฀
promptly฀to฀any฀shareholder฀upon฀written฀or฀oral฀request฀to฀Kroger’s฀Secretary฀at฀our฀executive฀offices,฀that฀
it฀intends฀to฀propose฀the฀following฀resolution฀at฀the฀annual฀meeting:
“Whereas:฀ Antibiotic฀ resistance฀ has฀ become฀ a฀ public฀ health฀ crisis.฀ ‘Superbugs’฀ -฀ bacteria฀ immune฀ or฀
resistant฀to฀ one฀ or฀ more฀antibiotics฀-฀infect฀over฀2฀million฀people฀in฀the฀U.S.฀and฀kill฀over฀23,000฀annually,฀
according฀to฀the฀Centers฀for฀Disease฀Control฀and฀Prevention.฀As฀resistance฀increases,฀medications฀used฀to฀
treat฀human฀ infections฀lose฀their฀ effectiveness,฀leading฀the฀World฀Health฀Organization฀to฀warn฀ of฀“a฀ post-
antibiotic฀era.”
An฀important฀cause฀of฀antibiotic฀resistant฀bacteria฀is฀the฀overuse฀of฀antibiotics฀in฀food-animal฀production,฀for฀
the฀routine,฀non-therapeutic฀purposes฀of฀promoting฀faster฀growth฀or฀preventing฀(instead฀of฀treating)฀illness.฀
In฀the฀U.S.,฀more฀than฀70%฀of฀medically฀important฀antibiotics฀are฀sold฀for฀use฀on฀food-animals.
Calls฀ to฀ restrict฀ or฀ ban฀ the฀ routine฀ use฀ of฀ medically฀ important฀ antibiotics฀ for฀ food-animals฀ have฀ been฀
endorsed฀ by฀ the฀ American฀ Medical฀ Association,฀ American฀ Public฀ Health฀ Association,฀ and฀ other฀ leading฀
health฀organizations:
Eating฀food฀contaminated฀with฀antibiotic฀resistant฀bacteria฀is฀one฀way฀in฀which฀superbugs฀can฀be฀transmitted฀
from฀ a฀ farm฀ to฀ human฀ population.฀ Government฀ testing฀ of฀ raw฀ supermarket฀ meat฀ detected฀ ‘superbug’฀
versions฀of฀salmonella,฀E.฀coli,฀or฀other฀bacteria฀in฀81%฀of฀ground฀turkey,฀55%฀of฀ground฀beef,฀and฀39%฀of฀
chicken฀sampled.
An฀outbreak฀of฀antibiotic-resistant฀Salmonella฀from฀chicken฀last฀year฀resulted฀in฀more฀than฀600฀known฀illnesses.฀
Several฀Kroger฀private฀brand฀chicken฀products฀were฀recalled฀by฀Foster฀Farms฀as฀part฀of฀this฀outbreak.
A฀ 2012฀ Consumer฀ Reports฀ survey฀ concluded฀ that฀ the฀ majority฀ of฀ consumers฀ surveyed฀ were฀ extremely฀ or฀
very฀concerned฀about฀the฀use฀of฀antibiotics฀in฀animal฀feed฀and฀would฀spend฀more฀for฀meat฀produced฀without฀
these drugs.
Companies฀including฀Whole฀Foods,฀Panera฀Bread,฀Chipotle,฀and฀Chik-fil-A฀have฀policies฀against฀purchasing฀
meat฀produced฀with฀antibiotics,฀heightening฀the฀risks฀to฀companies฀not฀acting฀on฀this฀issue.฀Perdue฀Foods฀
announced฀that฀it฀has฀phased฀out฀routine฀antibiotic฀use฀in฀the฀production฀of฀its฀chicken฀meat,฀demonstrating฀
that฀meat฀can฀be฀produced฀on฀a฀large฀scale฀without฀overusing฀antibiotics.
Kroger฀is฀one฀of฀the฀largest฀supermarket฀chains฀in฀the฀nation,฀with฀perishable฀food฀including฀meat฀and฀deli฀
items฀accounting฀for฀around฀21%฀of฀the฀company’s฀revenue฀in฀2013.฀Consequently,฀food฀quality฀and฀safety฀
trends฀should฀be฀of฀top฀priority฀to฀the฀company.฀Kroger฀faces฀reputational฀risk฀and฀liability฀concerns฀if฀it฀sells฀
meat฀containing฀antibiotic฀resistant฀bacteria.
Resolved:฀Shareholders฀request฀that฀the฀ Board฀ undertake฀and฀ publish฀ a฀study฀ of฀policy฀options฀that฀ could฀
reduce฀ or฀eliminate฀ routine฀antibiotic฀use฀in฀the฀ production฀of฀its฀ private฀ label฀ brand฀meats.
Supporting Statement:
Proponents suggest that the Board explore policy options such as the following:฀adopt฀a฀time-bound฀
plan฀to฀phase฀out฀purchases฀of฀meat฀produced฀with฀routine฀antibiotic฀use;฀establish฀a฀new฀procurement฀policy฀
that฀gives฀preference฀to฀suppliers฀that฀meet฀these฀standards;฀public฀declaration฀of฀such฀preferences.฀“Routine฀
antibiotic฀use”฀means฀using฀antibiotics,฀on฀food฀animals,฀that฀belong฀to฀the฀same฀classes฀of฀drugs฀administered฀
to฀humans,฀for฀the฀non-therapeutic฀purposes฀of฀growth฀promotion฀or฀disease฀prevention.”