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US companies vie to be declared ‘essential’ in crisis

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Via Financial Times

Businesses from pet stores to cannabis growers are presenting themselves as “essential” to avoid being closed by US authorities seeking to slow the spread of the coronavirus. 

A widening number of cities and states have issued directives for businesses to close and people to limit their movements to slow the outbreak. On Thursday the entire state of California was ordered to stay home except for essential needs. New York followed on Friday.

This week trade groups went into high gear to demonstrate how essential their industries are. The campaigns highlight the interdependent nature of the economy, in which a business that might not seem essential is crucial to one that clearly is. 

The pushback also reflects confusion as definitions of what is essential vary from place to place. The US Chamber of Commerce, a business lobby in Washington, has urged the Trump administration to provide a federal standard for states and cities to follow.

California’s order, which took effect on Thursday, cited petrol stations, pharmacies, groceries, banks and laundries among essential businesses that could stay open. It said businesses such as restaurants, gyms and nightclubs would be closed. 

Workers involved in sectors designated by the federal government as “critical infrastructure” — which include energy, transport and agriculture — are exempt from California’s stay-home order. 

However, industry groups point to vast grey areas over who is and who is not essential. The US Chamber of Commerce has petitioned for a long national list of essential businesses, from stock exchanges to dry cleaners. 

The National Retail Federation asked the White House for “clear guidance,” citing “conflicting state and local orders that are triggering consumer, worker and business confusion”. The lobby urged that hardware stores and big-box stores, as well as others further up the supply chain such as warehouses and highway truck stops, should be deemed essential. 

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Mandatory Credit: Photo by ERIK S LESSER/EPA-EFE/Shutterstock (10588573c) Volunteers at Hook Hall prepare care packages for scores of suddenly unemployed restaurant and hospitality workers in Washington, DC, USA, 19 March 2020. The Restaurant Association Metropolitan Washington is leading the effort. The US Department of Labor has reported a huge spike in unemployment claims in the wake of the coronavirus COVID-19 pandemic. Coronavirus COVID-19 reactions in Washington, DC., USA - 19 Mar 2020
Volunteers at Hook Hall prepare care packages for scores of suddenly unemployed restaurant and hospitality workers in Washington on Thursday © ERIK S LESSER/EPA-EFE/Shutterstock

A coalition of pet industry groups has urged governments to put pet stores on the “essential” list. “It is vital that businesses that provide products or services for the care of pets, and those that house animals, are included among the critical infrastructure that is allowed to remain open throughout the crisis,” they wrote in a letter to officials.

The definition of essential has shifted in the city of Philadelphia, which directed all “non-essential” businesses to close for two weeks including cinemas, gyms and clothing stores. Of those permitted to stay open, car mechanics were included but bicycle shops were not, said Randy LoBasso, policy manager at the Bicycle Coalition of Greater Philadelphia, an advocacy group.

The city reversed course after pressure from cyclists, who noted that more people will ride around the city as public transport “seemed like not a very safe place to be”, Mr LoBasso said. 

Recreational marijuana in Nevada was illegal until 2017. On Wednesday, Toronto-listed cannabis grower 1933 Industries informed investors that it would be able to carry on as an “essential business,” even after the governor ordered a 30-day shutdown of casinos on the Las Vegas Strip. 

A sign announcing sanitizer production is placed at the entrance to the Eight Oaks Farm Distillery in New Tripoli, Pennsylvania, on March 19, 2020. - Eight Oaks is one of many distilleries in the US to begin producing hand sanitizer instead of spirits in response to the coronavirus, COVID-19, pandemic. (Photo by Branden Eastwood / AFP) (Photo by BRANDEN EASTWOOD/AFP via Getty Images)
A sign announcing sanitizer production is placed at the entrance to the Eight Oaks Farm Distillery in New Tripoli, Pennsylvania, on Thursday © AFP via Getty Images

Cannabis demand during the pandemic has been undergoing “a huge surge,” said Alexia Helgason, 1933 Industries’ vice-president of investor relations. “There’s a lot of anxiety going on right now and people need these products to help them through these tough times.” 

As California contemplated its shelter-in-place order, the California Life Sciences Association biopharma trade group urged local officials to consider potential interruptions to its supply chains and laboratory operations. 

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“CLSA and our member companies are strongly committed to finding a vaccine or cure for Covid-19 and in the immediate future prevent further spread. During these unprecedented times, it is essential that efforts critical to public health continue,” said a spokesman. 

Businesses and organisations that run critical infrastructure have forced more employees to work from home while enacting strict rules for staff who must do their jobs on site. 

At the Electricity Reliability Council of Texas, which operates the southern state’s power grid, surfaces are wiped down between shifts and employees must check their body temperatures every time they arrive on site, according to a pandemic plan updated this week. 

Scott Aaronson, vice-president of security and preparedness at the Edison Electric Institute, a trade group for US power utilities, said he was unaware of any coronavirus case to have reached control rooms, but members were taking precautions. 

“One of the maxims of business continuity is: everybody’s important, but not everybody is essential,” Mr Aaronson said. “Our companies represent 5 per cent of US gross domestic product, and it is the first 5 per cent because all the others rely on us.”

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