Business overview
Environmental matters
Ahold's operations are governed by environmental laws and
regulations in the countries in which it operates, including
those concerning the discharge, storage, handling and
disposal of hazardous or toxic substances. Ahold believes
that it possesses all of the material permits required for the
conduct of its operations and that its current operations are
in material compliance with all applicable environmental
laws and regulations.
The Company uses hazardous substances and generates
hazardous wastes in some of its operations. Under the
U.S. Federal Comprehensive Environmental Responsibility,
Compensation and Liability Act ("CERCLA") and similar
state laws, generators of hazardous wastes may be jointly
and severally liable for the clean-up of hazardous wastes
from the facilities to which the generator sent those wastes
for disposal. However, the Company is not aware of any
material asserted or threatened claims against it relating to
any such offsite disposal location.
Clean-up of hazardous substances or petroleum releases
to soil or groundwater takes place at certain of the
Company's facilities. At other of the Company's facilities,
studies have shown that soil and groundwater have been
impacted by gasoline or petroleum constituents, but the
relevant regulatory agencies have not required remediation
at those sites. In addition, certain of the Company's facilities
are located on premises that are currently or were formerly
gasoline stations or other industrial sites at which
contamination from prior operations may exist, but there
have been no environmental investigations to determine
the condition of those sites. The Company does not believe
that any potential clean-up costs associated with those
facilities that may be allocated to it will materially impact
its financial position.
Government regulation
U.S. regulations
As a marketer and distributor of food products in the United
States, the Company is subject to regulation by numerous
federal, state and local regulatory agencies. At the federal
level, the Company is subject to the Federal Food, Drug and
Cosmetic Act, the Bioterrorism Act and regulations
promulgated by the U.S. Food and Drug Administration
(the "FDA"). The FDA regulates manufacturing and holding
requirements for foods, over-the-counter drug products
and pharmaceuticals, specifies the standards of identity
for certain foods and prescribes the format and content
of certain information required to appear on food
product labels.
For certain product lines, the Company is also subject
to the Federal Meat Inspection Act, the Poultry Products
Inspection Act, the Perishable Agricultural Commodities
Act, the Country of Origin Labeling Act and regulations
promulgated thereunder by the U.S. Department of
Agriculture (the "USDA"). The USDA imposes standards
for product quality and sanitation, including the inspection
and labeling of meat and poultry products and the grading
and commercial acceptance of produce shipments from
the Company's vendors.
Money order and wire transfer services offered by the
Company's stores are subject to regulations promulgated
under the USA Patriot Act, which is administered by the
U.S. Department of the Treasury. The Company's lottery,
alcohol and tobacco sales and operations are regulated
at the federal and state level.
Ahold and its products are also subject to state and local
regulation through such measures as the licensing of the
Company's facilities, enforcement by state and local health
agencies of state and local standards for its products and
facilities and regulation of its trade practices in connection
with the sale of its products. The Company's advertising,
weights and measures of products, as well as other
marketing, labeling and consumer protection issues,
are regulated by state agencies and state attorney general
offices, which have jurisdiction over state consumer
protection statutes and antitrust statutes.
The Company's pharmacy operations are subject to federal,
state and local regulations and licensing, including state
pharmacy boards, Medicaid and Medicare reimbursement
regulations and third-party insurance regulations, as well as
the Health Insurance Portability and Accountability Act and
regulations promulgated by the U.S. Department of Health
Human Services. The Company's premises are generally
inspected at least annually by federal and/or state
authorities. These facilities are also subject to inspections
and regulations issued pursuant to the Occupational Safety
and Health Act by the U.S. Department of Labor, which
require Ahold to comply with certain manufacturing, health
and safety standards to protect its employees from accidents
and to establish hazard communication programs to
transmit information about the hazards of certain chemicals
present in certain products it distributes.
Ahold is also subject to regulation by numerous federal,
state and local regulatory agencies. The Company's store
operations and real estate operations are subject to zoning,
environmental and building regulations, as well as laws that
prohibit discrimination in employment on the basis of
disability, including the Americans with Disabilities Act,
and other laws relating to accessibility and the removal
of barriers. The Company's workers' compensation and
workers' compensation self-insurance are subject to
regulation by state regulatory agencies. In addition, the
Company's captive insurance company, The MollyAnna
Company ("MollyAnna"), which insures its operating
companies for losses relating to self-insurance, is regulated
by the Insurance Division of the State of Vermont. Because
Ahold's securities are publicly traded in the United States,
the Company is also subject to the rules and regulations
promulgated by the SEC, including those promulgated
under the Sarbanes-Oxley Act. In addition, the Company
is subject to the provisions of the U.S. Foreign Corrupt
Practices Act relating to the maintenance of books and
records and anti-bribery.
40 Ahold Annual Report 2006
