On Closing of Stella d'oro: No Gold Star for Brynwood Partners Investment Group

As recently reported, Stella D’Oro Cookies will be closing its Bronx, New York factory. And with it, another homegrown American-created and made product is gone.

Stella D’Oro products were noted for being pareve, made without milk or dairy, making them very popular with Kosher consumers. When purchased by Kraft foods they began experimenting with cheaper ingredients, ultimately shedding Stella D'oro's kosher designation. As Walletpop.com reported, This led to an immediate uproar among the Jewish consumers who formed the bulk of the company's customer base. Kraft quickly changed back to the original recipe and re-instituted its kosher certification. Kraft sold Stella D'oro to a private equity firm, Brynwood Partners. Soon thereafter, the company began austerity measures, attempting to cut benefits and pay for Stella D'oro's workers. In August 2008, 134 of them went on strike, and were immediately replaced with backup workers that Brynwood had already gathered. Last month, a federal judge ruled that Brynwood must rehire its striking employees. Although the firm complied with the court order, it almost immediately announced that the factory will be closing. The Bronx location will stay open until October, as Brynwood prepares to move all production to other facilities.

I know, I know, Business is business, but does it really have to be that way? Brynwood Partners, the private investment firm that bought the company from Kraft Foods, that bought it from Nabisco, that bought it from the original owners who were Italians from Trieste probably wanted to shift production to Pondicherry, India (well, maybe not, but I just like the way that sounds). In so doing, though, they are wrecking an American cultural-culinary tradition, plus another link forged between Italians and Jews….



Even more interestingly, the Huffington Post has now reported that a Bronx union local is fighting the private equity fund Byrnwood Partner's decision announced last week to close the Stella D'Oro plant rather than bargain with the union for a fair wage. Incredibly, it was also revealed this week that Byrnwood Partners has received well over $175,000 in taxpayers subsidies to keep its factory operating in the Bronx, but it's shutting it down anyway, claiming it's not willing to pay union pay and benefit demands.

Union leader Joyce Alston, the president of Local 50 of the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCGTM) International Union, proclaimed:

"We cannot allow the private equity predators at Brynwood Partners to ignore the law. The company cannot simply ignore the decision of a federal administrative law judge and it cannot punish the workers at Stella D'oro for exercising their rights under the law by filing unfair labor practice charges, winning their case and conducting a 10 month unfair labor practice strike in defense of the law.

If the rule of law is to mean anything, the National Labor Relations Board should get an injunction to stop this shutdown and enforce the judge's ruling and the national labor law. At the same time, we stand ready, willing and able to reopen negotiations with the company." ?

Meanwhile, if Federal bailout $$ is (you will pardon the expression) kosher for ham http://thehill.com/leading-the-news/usda-760000-lbs.-of-ham-for-1.2m-2009-07-20.html... why not Stella D'oro cookies? Maybe new, socially responsible investors can step in and turn this mess around. The Brynwood’s handling of this matter is simply another example of the same predatory and morally un-ethical financial philosophy that brought us the current financial crisis and the Madoff ponzi scheme, where greed is good and no questions need be asked. Well, in the case of Stella D’oro, people are beginning to ask questions…

More from Huffington Post on the legal ramificiatons of the closing and the predatory practices of Brynwood: http://www.huffingtonpost.com/art-levine/stella-doro-workers-fight_b_234743.html

More details on Stella D'oro here: http://www.walletpop.com/blog/2009/07/07/stella-doro-closes-bringing-a-piece-of-history-with-it/