WASHINGTON —The Defense Department is considering creating its own private-label products for military commissaries instead of offering national brands, something that would hurt military families by affecting the quality and pricing of products, marketing experts and advocates for the families told a House committee Wednesday.
Military families rely on knowing what they are getting when they buy at a military commissary, Brooke Goldberg, a lobbyist for the Military Officers Association of America, told the House Subcommittee on Military Personnel.
The Defense Commissary Agency’s proposed switch from selling national brand items to its own private-label products could affect the quality of what is sold, which in turn would alienate military families who support the commissary system, Goldberg said.
“We have found military members consistently rank their commissary benefit very highly, alongside health care,” she said.
Patrick Nixon, president of the American Logistics Association, agreed. He said the Defense Commissary Agency lacks both the resources and expertise to successfully market its own private-label items. It would take time and money to build the capacity to equal the quality of national brands, he said.
The hearing follows the September release of a DoD-commissioned report on the effects of potential commissary reforms, including variable pricing. Though Rep. Tom MacArthur, R-N.J., argued commissary costs represent only a fraction of total military spending, other committee members like Minnesota Rep. Timothy Walz said there are many ways the current commissary system could be more cost-effective.
In an interview, Susan Maybaumwisniewski, senior vice president for projects for Business Executives for National Security, said there’s no silver bullet for commissary reform.
“It depends what the goal is,” she said. “Save $1 billion or maintain a valued service for our servicemen and women.”
Her organization, a think tank that applies private sector business expertise to national security issues, argues that the services the commissaries provide are handled well by the private sector and could be privatized, Maybaumwisniewski said. However, commissaries — along with other grocery stores — continue to lose market-share to wholesale stores like Costco, she said.
Goods at military commissaries are sold at the cost of the good plus a 5 percent surcharge that helps fund commissary operating costs, and these prices are fixed for U.S. military commissaries here and overseas. According to Eileen Huck, a lobbyist for the National Military Family Association, the commissary benefit represents the equivalent of a 2 percent to 9 percent pay raise for members of the military.
Changes in pricing at commissaries not only will hurt military families’ pocketbooks, but could also damage the sense of community that often springs up among military families using the same local commissary, Goldberg said.
“In rural or low-density regions … commissaries are places where military families can meet up,” she said. “We risk these changes affecting the other systems that support our military families.”
For Maybaumwisniewski, the commissary’s central problem is one of identity.
“We haven’t seen which market commissaries are trying to serve… [the Defense Commissary Agency] remains all things to all people,” Maybaumwisniewski said. “It’s a tough model and a tough market, but we applaud Congress and DoD for searching for alternatives.”
MacArthur echoed expert calls for caution with any planned commissary reform, noting that ongoing plans for defense health reform take priority.
“We need to be aware of the compounding effect of too much change at once,” he said.
A Government Accountability Office report on the DoD’s recommendations is scheduled to be issued in late June.
