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The increased cost of security to the food industry since the events of September 11, 2001

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Bongers, Henry B.
May 05, 2004
Food industry and trade -- United States -- Costs; Terrorism -- United States -- Prevention
The objective of this study is to describe the increased security cost to the food industry after the terrorist events of September 11, 2001. This includes government required initiatives and industry expectations. A detailed analysis was made of the increased security costs at all 42 facilities in one large company. The total cost to the company was divided by forty-two to arrive at an average cost to each facility. This cost was extrapolated to the estimated four hundred thousand food processing facilities worldwide to arrive at an estimated total cost to the industry. The increased cost to the company for compliance with programs and policies was $496,010, or an average of $11,810 per facility for the first year. Extrapolating to the whole industry this is an increase in security cost of U.S. domestic facilities of $2.4 billion and to the entire worldwide industry of $4.7 billion. The costs to the company for physical security will be $222,200 for the first year for an average cost of $5,290 to each facility. Future costs to the company will be $1.0 million annually or $24,606 per facility. This includes physical security, program compliance, and training. Future costs to the U.S. domestic industry will be $4.9 billion and $9.8 billion annually to the worldwide industry to maintain the security levels. The terrorist events of September 11, 2001 increased the awareness of the vulnerabilities of the food industry. This increased awareness resulted in requirements to improve security. The requirements came from both the government and private industry expectations. These requirements result in increased costs to the food industry.
Date thesis submitted: May 5, 2004. This file was last viewed in Adobe Reader 6.0
Thomas Anderson, Thesis Chair
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