Dietz & Watson Inc. has a beef with Boar’s Head Provision Co., its larger competitor.

A Philadelphia maker of deli meats and cheeses, Dietz & Watson is casting itself as the defender of consumer choice in calling on its Florida rival to end its practice of demanding exclusivity to sell in supermarket delis.

Dietz & Watson and Boar’s Head duke it out in deli sections where store personnel slice to order. Given the “premium” nature of the brands, both charge a buck or two more per pound than a store’s private-label brand meats and cheeses.

But you won’t find Dietz & Watson and Boar’s Head side-by-side in that deli case.

Case in point: About a dozen Harris Teeter supermarkets in the Charlotte, N.C., area dropped Dietz & Watson products this spring in order to carry Boar’s Head. A couple of food-oriented blogs buzzed with customer comments praising or panning the switch.

Dietz & Watson president and CEO Louis Eni said the customer reaction to the Harris Teeter move spurred him to draw attention to Boar’s Head’s practice of insisting that grocers boot out other brands, including some pre-packaged products.

Shoppers lose when any product maker demands that a retailer carry only its line and no other, Eni said. Dietz & Watson has not and will not do that, he said.

But seeking exclusivity is Boar’s Head’s business model, according to Mark Lang, a food marketing lecturer at St. Joseph’s University. He saw it firsthand as a marketing executive at Publix Super Markets Inc. in Florida, where Boar’s Head has managed the 900-story chain’s deli cases for years.

Lang called Boar’s Head’s aggressive distribution network its “secret sauce.”

Most areas of a supermarket are self-service. Not the deli or bakery, where customers must ask interact with employees to get the cold cuts or birthday cakes they want.

A well-run deli should be a profit center, Lang said. But we’ve all encountered delis that aren’t well-run. Boar’s Head’s distributors are the best at whipping a deli into shape, even training the store’s own staff, Lang said.

I called Boar’s Head’s corporate offices in Sarasota, Fla., seeking comment. With the spokeswoman on vacation, I asked to speak with someone in management about its practices. No one called back.

Dietz & Watson calls itself the No. 2 deli brand, which is quite possible but with the biggest players all privately held it’s hard to get independent confirmation. Eni would say only that Dietz & Watson has annual sales of more than $300 million, having grown at a double-digit pace for several years in a row.

Boar’s Head and Dietz & Watson have much in common. Frank Brunckhorst started making Boar’s Head cooked hams in Brooklyn in 1933, while Gottlieb Dietz began making deli meats in 1939. Both have expanded beyond their regional strongholds in recent years.

Boar’s Head is available through the U.S. with Dietz & Watson sold in more than 40 states.

Eni insists Dietz & Watson is making more inroads than it is losing. It recently began distributing products to Meijer, a Grand Rapids, Mich.-based chain of 189 stores in the Midwest. Costco Wholesale warehouse clubs is another new client.

Why doesn’t Dietz & Watson fight back with its own exclusivity arrangements? Eni said he thinks that it's unfair to customers to limit their choices.

When it comes to grocery stores, consumers have a lot of choice. And supermarkets have been known to relent when enough customers demand the return of a product.

When one bank wants to buy another, management runs the numbers to be sure the deal makes sense.

But First Niagara Financial Group Inc.’s top managers felt extra good about snapping up Harleysville National Corp. because they’ve spent a fair amount of time in Montgomery County.

CEO John R. Koelmel told analysts that he’s made the trek from upstate New York to Haverford College, which straddles Delaware and Montgomery Counties, a lot over the last four years.

His daughter, Liz, played lacrosse for the Fords for four years. Koelmel mentioned being familiar with the area’s lacrosse fields and “making the rounds through some very prime-time geography,” during the call.

“This is some real nice markets in terms of household income,” Koelmel said.

Michael W. Harrington, chief financial officer of First Niagara, said he grew up in the Harleysville-Lansdale area. He worked in Philadelphia’s banking business, including one year as CFO of Equity Bank, before joining First Niagara in 2003. (Equity Bank is now Susquehanna Patriot Bank.)

“I think I’ve brought a sense of that familiarity to our conversations around this opportunity,” Harrington, 45, told analysts.

New under the sun

Coal may still be king in Pennsylvania, but wind power is growing.

According to the American Wind Energy Association, Pennsylvania’s wind energy capacity grew 28 percent during the second quarter.

The total installed wind power capacity in the state is 463 megawatts. For the U.S. as a whole, total installed capacity is 29,400 megawatts.

Texas, by far, is the leader with 8,361 megawatts installed. It is followed by Iowa (3,043 megawatts), California (2,787 megawatts) and Washington (1,575 megawatts).

The association lists four projects now under construction that would add 285 megawatts of capacity to Pennsylvania.

New Jersey? Only 8 megawatts installed so far.
 

An insider trading case The Inquirer and other news organizations wrote about in May 2008 got new attention today in a Wall Street Journal column.

The Game columnist Dennis K. Berman used a Securities and Exchange Commission case against an Ernst & Young partner in New York and a Philadelphia woman who worked at broker-dealer as an example of how the twists and turns in personal relationships can lead to inside tips on market-moving deals.

Berman reviewed transcripts from the trial in a New York federal court this May, and the tale he weaves leaves no one looking honorable.

Here's a link to his column.

Ex-Ernst & Partner James Gansman was convicted on six counts of securities fraud; he was acquitted on four other counts. Donna Murdoch, a managing director at Keystone Equities Group L.P., of Oaks, pleaded guilty to 15 counts of securities fraud and agreed to cooperate with prosecutors in Gansman's trial. Neither has been sentenced.

Here's another link to the original complaint.

Change doesn’t come quickly to the accounting profession. Rule modifications are proposed, debated and implemented over a period of years.

It’s dominated by a Big Four that’s remained the same since the Enron debacle led to the demise of Arthur Andersen L.L.P. in 2002.

But below the top tier are some regional firms that are involved in so many deals, they could give a few of their clients a run for their money.

Locally, our accounting rocket is Parente Randolph L.L.C., based on the 44th and 45th floors of One Liberty Place. The firm absorbed three accounting firms in early 2009.

Yesterday, Parente Randolph announced its biggest deal yet: a “merger of equals” with Beard Miller Co. L.L.P., of Reading. Looking at the scale of each accounting and consulting firm, that seems an apt description of the transaction.

Parente Randolph has 87 principals and more than 600 total employees in 14 offices. Beard Miller has 85 partners and more than 550 employees in 13 offices.

The two appear one after the other on the 2009 Accounting Today Top 100 Firms list: Beard Miller was No. 35 with net revenues of $75.2 million for 2008, while Parente Randolph was No. 36 with $74.3 million.

Put them together and the as-yet unnamed new firm would have ranked No. 21 on that list, ahead of the firm that has been the Philadelphia area’s biggest for years, Smart Business Advisory & Consulting L.L.C., based in Devon.

Parente Randolph chairman and CEO Robert J. Ciaruffoli, who will be the chief executive of the combined company, said each firm brings its own strengths. Beard Miller has sizable practices in public utilities, insurance and financial institutions. Parente Randolph has deep experience with higher-education and health-care institutions.

There’s not much overlap, although each organization has offices in Pittsburgh and the Lehigh Valley. They’ll look to combine them, he said. Philadelphia will be the headquarters of the combined Parente/Beard.

Discussions that led to the merger began in early December, Ciaruffoli said. He and Beard Miller chairman and CEO Lamar Stoltzfus compared notes on strategic plans that were practically mirror images. (Stoltzfus will become chairman of the new entity.)

In a deal like this, no money changes hands. Rather, the partners of each firm get new shares of the new firm. Beard Miller partners unanimously approved the transaction June 30, while the principals of Ciaruffoli’s firm did so July 18. The deal is expected to close in the middle of the fourth quarter.

“We want to be the dominant firm from New York City to Washington, D.C.,” Ciaruffoli said.

With annual revenue of $175 million and more than 1,200 employees, this new mid-tier firm will be a few steps closer to that goal.

Two Philadelphia-area regional accounting and consulting firms today said they will merge, creating one with $175 million in annual revenue.

Parente Randolph L.L.C. and Beard Miller Co. L.L.P. said they intend to combine their operations during the fourth quarter. The headquarters of the firm, which will take on a new name, will be in Philadelphia.

The two are similar in size. Center City-based Parente Randolph has 87 principals and more than 600 total employees in 14 offices. Reading-based Beard Miller has 85 partners and more than 550 employees in 13 offices.

Parente Randolph chairman and CEO Bob Ciaruffoli would become CEO of the combined enterprise. Beard Miller chairman and CEO Lamar Stoltzfus would become chairman.

In a statement this morning, Ciaruffoli said the deal would enable the firm to bring a "broader array of industry expertise" to clients.

Stoltzfus cited "more industry-specific expertise, specialized tax consulting, and other business advisory resources" as reasons to combine.

Parente Randolph has grown by executing a series of mergers in recent years. It added its first New York-area offices in February when it bought Lazar Levine & Felix L.L.P., adding 85 people.

In January, Parente Randolph absorbed Altenburger, Uris, Caglioti & Heyman, of Cherry Hill, and William R. Hoffman Ltd., of Williamsport.

The argument favoring the creation of a “systemic risk” regulator goes like this:

If it was someone’s job to be vigilant and defuse investment bubbles or counter imprudent behavior by large financial institutions, we’ll never again face a financial crisis like the current one.

To that end, the Obama administration wants the Federal Reserve to act as a “systemic risk” regulator. It’s a responsibility Fed chairman Ben S. Bernanke welcomes.

As with many policy debates, there’s always one figure that you really want to hear from. To me, when people start talking about mucking with the Fed, that person is Allan H. Meltzer, the Carnegie Mellon University professor who’s been writing the definitive history of the U.S. central bank. Only one of three planned volumes has been published, and it covers the years 1913-1951.

I made a game attempt to read the 800-page tome I’d borrowed from the library earlier this year, but failed to get halfway through it. And I’d renewed it twice.

The dense, scholarly work ends with the year 1951, when the Fed regained its autonomy from the Treasury Department. Now with rumblings from Congress about new oversight over the Fed, it’s fitting that Meltzer testified before the Senate Banking Committee on July 23. Here's a link to that testimony.

Systemic risk defies clear definition, according to Meltzer. Not knowing what it is makes it impossible to regulate, and he views the Fed as quite unfit to sniff it out.

He reminded the panel of the Fed’s past inaction when crises emerged: the Latin American debt and U.S. savings and loan crises in the ’80s, and the dot-com bubble in the late ’90s.

And he worries that the Fed, which can be effective as a central bank only if it is independent, will suffer if it must also play “too big to fail” sheriff.

“Congress, the administration, and failing banks or firms will want to influence decisions about what is to be bailed out,” he said. “I believe that is a mistake.”

Meltzer repeated a line that he’s used before: “Remember that capitalism without failure is like religion without sin. It removes incentives for prudent behavior.”

To Meltzer, it would be prudent for lawmakers to rethink giving the Federal Reserve a task no regulatory agency can hope to perform.

Ernst & Young L.L.P. sees signs of more activity in the initial public offering market.

As of June 30, the accounting firm counted 28 companies that hope to go public by selling common shares. That’s down from 44 at the end of March, but that’s good because there were 10 successful IPOs in the second quarter, up from two in the first.

Just don’t look around here for an IPO revival. PRWT Services Inc., of Philadelphia, was trying to go public by way of being acquired by a public shell company. But both sides called it off last week.

If anything, the area’s ranks of public companies keep getting smaller. Acquisitions, like Dow Chemical’s purchase of Rohm & Haas, is one way we lose them. Sometimes, companies run out of cash, such as Genaera Corp., the small drug developer that is in the process of liquidating.

Other times, tiny companies simply don’t think the extra paperwork and scrutiny that come with being public is worth it.

That fits New Horizons Worldwide Inc., of Conshohocken, which is asking its shareholders to approve a 1-for-25 reverse stock split next week. Anyone holding fewer than 25 shares won’t be a New Horizons shareholder anymore, but will have the right to be paid $1.85 per share.

By doing that, the company will cut the number of its shareholders below 300, enabling it to stop filing documents with the Securities and Exchange Commission.

While the transaction will cost New Horizons about $100,000, the franchiser and operator of computer-training centers says it will save more money by being privately held. It estimates it will save about $125,000 in accounting and audit fees, $50,000 in fees for its securities counsel, and $50,000 from its directors’ and officers’ liability insurance policy.

Like other companies who choose to “go dark,” New Horizons cites the burdens, both in terms of cost and time spent by officers and staff, of the Sarbanes-Oxley Act, the corporate governance law passed in the wake of the Enron and WorldCom accounting scandals earlier this decade.

While Sarbanes-Oxley was enacted in 2002, small companies like New Horizons, which had $37.2 million in revenues in 2008, did not have to comply fully with the law until 2009.

Given that its directors and executive officers own 65 percent of shares, next week’s vote looks like a formality and New Horizons’ soon should be rebooting as a private company.

The nation’s state legislators, meeting in Philadelphia this week, may have hoped to hear two economists tell them the recession is ending, the stimulus package is working, and things will be better next year.

One out of three ain’t bad.

The U.S. economy could be a few months from bottoming, but David Wyss, of Standard & Poor’s, and Simon Johnson, of MIT, provided many reasons why federal stimulus efforts have lagged and unemployment will remain a challenge in 2010.

Worse, given the trillions committed to financial bailouts, we haven’t fixed anything yet, they warned.

All of Washington’s efforts on financial reform are aimed at patching a U.S. system built in the 1930s. With today’s interconnected financial giants, leaders of the developed and developing nations need to adopt global accounting standards and regulatory mechanisms, Wyss said.

But “it’s not even being discussed,” he said.

Johnson was more blunt about the potential for new financial crises: “We’re going to be just as vulnerable going forward.”

The two were part of a panel discussion on the economy at the National Conference of State Legislatures at the Convention Center yesterday. (Comcast Corp. executive vice president David L. Cohen also took part.)

Moderator Kathleen Hall Jamieson, of the University of Pennsylvania, asked what states can do to address financial-sector reform. “States are doing their best to make it worse,” Wyss said.

How? Insurance regulation is still done at the state, not federal, level. AIG, rescued with a $180 billion federal bailout, had 200 regulators, Wyss said, noting, “When anything has 200 regulators, you have no regulator.”

In effect, the states are giving companies “the ability to do regulatory arbitrage,” Wyss said.

Johnson agreed. “Big companies are gaming you,” he told the state legislators and staffers in the crowd. Under the current system, states are pushing “risks down the road.”

He also emphasized that the U.S. must make its largest financial institutions smaller. “You can’t prevent failures or bubbles. But when they occur, you must make sure the damage is less than” what the world has experienced in this crisis, he said.

After the trillions of dollars committed to financial bailouts and hundreds of billions promised for economic stimulus programs, the nation's state legislators may have hoped to hear two noted economists tell them when things will start to get better.

Instead David Wyss, of Standard & Poor's, and Simon Johnson, of MIT, gave them reasons why all of us should worry that we haven't fixed anything yet.

All of the hearings in Washington regarding financial reform are aimed at fixing a system built in the 1930s. However, today's world is one of global financial giants, Wyss said. Leaders of the developed and developing countries need to move toward adopting global accounting standards and regulatory mechanisms.

But, Wyss said, "it's not even being discussed."

Wyss and Johnson were part of a panel discussion about the economy at the National Conference of State Legislatures at the Convention Center in Philadelphia this morning. (Comcast Corp. executive vice president David L. Cohen also took part.) Here's a link to a synopsis of the discussion on the NCSL Web site.

Both economists envision the U.S. economy bottoming within a few months and beginning a slow recovery. While the panel spend a lot of time discussing the $787 billion economic stimulus program, it was reform of the financial sector that produced the most spirited discussion.

Moderator Kathleen Hall Jamieson, of the University of Pennsylvania, asked what states can do to address financial sector reform. "States are doing their best to make it worse," Wyss said.

How? Insurance regulation is still done at the state, not federal, level. AIG, rescued by the federal government with a $180 billion bailout, is an insurance company that had something like 200 regulators, Wyss said. "When anything has 200 regulators, you have no regulator," he said.

In effect, the states are giving companies "the ability to do regulatory arbitrage," Wyss said.

Johnson was quick to agree. "Big companies are gaming you," he told the state legislators and staffers in the crowd. Under the current system, states are pushing "risks down the road."

Most of the reform efforts will not work and will be fought every step of the way by the financial industry, Johnson said.

He also emphasized that the United States must make its largest financial institutions smaller. "You can't prevent failures or bubbles. But when they occur you must make sure the damage is less than" what the world has experienced through this crisis, he said.