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The Honolulu Advertiser
Posted on: Sunday, November 8, 2009

Slump takes toll on pricing police


by Andrew Gomes
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Inspector Gen Miyashiro tests a scale at an O'ahu supermarket with calibrated weights. His agency is shrinking by half.

Photos by NORMAN SHAPIRO | The Honolulu Advertiser

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Hawaii news photo - The Honolulu Advertiser

One way to tell if a commercial scale or gas pump has been inspected is to look for this seal of approval. The dated seal affirms that the device met state requirements. The frequency of inspections is expected to deteriorate after the number of inspectors is cut in half next month.

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SUBJECT TO INSPECTION

Some items inspected by the Measurement Standards Branch of the state Department of Agriculture's Quality Assurance Division:

• Commodities sold by weight

• Anything sold in a store that's read by a cash register bar code scanner

• Octane in gasoline

• Made-in-Hawai'i product labels

• Taxi cab meters

• Airport luggage scales

• Vehicle odometers

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Hawaii news photo - The Honolulu Advertiser

The inspection sticker, placed on the front of the scale, indicates that the device meets state requirements.

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Paper towels: $1.59 a roll. Poke: $10.99 a pound. Gasoline: $3.30 a gallon. Taxi ride: $13.95 for five miles.

If something is sold based on a measurement, Oahu consumers and businesses have some extra assurance that the pricing is accurate because of a little-known state agency.

A small team of inspectors — you might call them the pricing police — make daily unannounced visits to companies from Costco to concrete suppliers, ensuring that businesses aren't overcharging other businesses or consumers.

Soon, though, the public will largely be left to fend for itself as state budget restrictions cut the inspection team in half.

"It's going to be tough to be a consumer in this state," said William Pierpont, manager of the state Agriculture Department's Measurement Standards Branch charged with price inspections. "People need every dollar they have in their pocket."

Measurement Standards employs six inspectors. Next month, planned workforce reductions will go into effect that will push three inspectors out of their jobs, with one being laid off and two opting to retire without a replacement. On top of the job losses, furloughs will further reduce the amount of work remaining inspectors will be able to perform.

MUM ON CUTBACKS

Exactly how or where inspections will be cut back aren't being publicized so that unscrupulous merchants aren't encouraged to take advantage of the situation.

But it's clear that testing and enforcement will be drastically weakened, and that inadvertent pricing errors will go unnoticed and uncorrected more often.

"We're going to pretty much be crippled," said John Ryan, administrator of the Agriculture Department's Quality Assurance Division, which oversees Measurement Standards.

One important role the agency plays outside of pricing is enforcing state laws that govern deceptive commodity package labels and laws that govern the sale of products advertised as being made in Hawaii or with local products, including coffee, macadamia nuts, Niihau shells, koa wood and "Island fresh" milk.

Ryan said the agency may no longer be able to respond to complaints involving such products, leaving industry players like Kona coffee farmers to fend for themselves.

Pricing issues, however, represent the bulk of inspection and enforcement activity for Measurement Standards.

Last fiscal year, the agency inspected 3,155, or almost half, of the 6,909 gas station pumps on the island, and found that 26 percent, or 820, didn't dispense the amount of gas reflected in the pump's display window within an allowed tolerance.

The team also inspected nearly all, or 2,271, of the 2,461 taxi cabs on Oahu to check the accuracy of their meters, and found that 10 percent, or 227, were out of compliance.

Inspectors also visit retail stores to test whether products ring up at the cash register for the same price listed on the shelf. Compliance in this area last fiscal year was very high, with only one store out of 136 tested that failed to meet the minimum compliance standard of less than 2 percent overcharges on random samples of 25 to 100 items.

Many commodities sold by businesses are manually packaged after they are weighed, such as fresh meat, seafood and produce sold at establishments from supermarkets to farmers markets.

By law, sellers are supposed to charge for only the weight of the product, or net weight that excludes packaging. So Measurement Standards inspectors test both these custom-packaged products and the scales that sellers use to price the items.

Wendell Murakami, the agency's senior inspector who has been on the job 22 years, said relatively tiny amounts of weight can add up to significant sums of money.

PRICING ACCURACY

For example, the plastic around a block of cheese can weigh 0.02 pound. If that plastic is included in the price of a 1-pound piece of cheese priced at $7, it represents 14 cents of the price. If a retail chain with 20 stores sold 50 pounds of cheese a day, the extra charge to consumers for the plastic in one year would be about $50,000.

"It does make a difference," Murakami said.

Last fiscal year, inspectors weighed 2,324 items with custom net weight packaging, and found 3.2 percent, or 74 items weren't priced correctly.

Items that are uniformly packaged often by machines — everything from bottled drinks to canned foods — also are tested by inspectors at random for product weight compliance, which was not met by 1 percent of items tested last fiscal year.

Pierpont said past examples of products that failed compliance include bags of ice, cups of ice cream and packages of popcorn. Often, inspectors trace the inaccuracies back to manufacturers or processors to find and correct the cause of a problem.

Besides food weighed and sold by retailers, inspectors test scales at a host of other businesses where items are weighed as part of a business transaction, such as a produce distributor or a concrete supplier. Even airline luggage scales are tested at the airport.

In fiscal year 2008, inspectors tested 917 of the 5,805 small scales (under 500-pound capacity) on Oahu, and found that 11 percent, or 101 scales, weren't accurate.

In some cases, businesses that happen to undercharge for a product can be saved money by inspectors.

Murakami said he once measured a taxi cab meter that was within an allowed tolerance but off to a degree that, when the inaccuracy was multiplied over an entire day of driving, meant $5 to $10 in lost income for the driver, who was surprised by the calculation.

"Accuracy everywhere is very important," he said.

ALREADY DOWNSIZED

Outside of routine inspections, Measurement Standards agents can respond to public complaints related to pricing that relies on a measurement, which previously have included investigations into restaurant hamburger patty weight, automobile odometers and parking garage timestamps.

"We can check almost anything if it involves a measurement and it involves a business transaction," said Gen Miyashiro, an agency inspector for 20 years.

Pierpont said measurement standard laws in Hawaii date back to at least 1887, and are presently enforced by a branch of the Agriculture Department because at one time agriculture dominated commerce in Hawaii.

However, the role of the agency has been diminished substantially, notably in the 1990s when state government was also struggling with reduced revenue in a flagging economy.

Before earlier cutbacks at the agency, inspectors were stationed in every county. The last Neighbor Island inspector was cut last year, and it's rare for inspectors to travel to a Neighbor Island to conduct inspection and enforcement work.

"It's been awhile since we had (statewide) coverage," said Pierpont, who amid the budget cuts is losing his job leading the agency, which also employs two office administrators and a metrologist who ensures that devices used to measure commodities or other measuring devices meet standards for accuracy.

Murakami and Miyashiro, who are retaining their jobs, hope that lost positions will be restored when state finances improve, but wonder what kind of priority will be given to the agency when money is available to restore some cuts that have hit other areas of state government hard, including schools, invasive species inspectors and the film office.

Murakami worries that even if Measurement Standards inspector positions are restored, it could take years to rebuild the amount of experience lost.

Miyashiro echoed that concern, and added that he's grateful the agency wasn't abolished entirely. "Our work kind of goes unnoticed," he said. "But it does make a difference."