Below: John Breach - BIFGA Chairman
At the recent BIFGA Farm Walk held at Victoria Farm Hadlow, BIFGA Chairman John Breach issued a summary of issues relating to relationships between retailers and their suppliers.
Invited to be the opening speaker at the BIFGA event, Mark White - Groceries Code Adjudicator (GCA) updated members on his commitment to ensuring fair play between retailer and supplier.
Since the establishment of the GCA the relationship between suppliers and retailers has worked on a much more agreeable structure!
The Farm Walk was attended by more than 90 and included representatives of several major Supermarketss
BIFGA
Below: Mark White - Groceries Code Adjudicator
FAIRNESS IN THE BRITISH APPLE AND PEAR SUPPLY CHAIN
UPDATE ON CURRENT ISSUES AFFECTING SOME BIFGA MEMBERS - MAY 2022
This document has been produced on behalf of the British Independent Fruit Growers' Association (BIFGA) for the attention of retailers, and other key people working in the British apple and pear supply chain. It will also be sent to relevant Government Ministers and the Groceries Code Adjudicator (GCA).
The issues listed below are affecting some of our members producing apples and pears, supplied to some of the leading UK retailers. Comments are based on issues raised at a recent BIFGA workshop, and by some other BIFGA members, and other stakeholders.
Even if all of the issues raised in this document are not contrary to the actual "letter" of the "Groceries Supply Code of Practice" (GSCOP), some certainly seem to go against the "principle of fair dealing", mentioned in Part 2 of the Code, which reads as follows:
"A Retailer must at all times deal with its Suppliers fairly and lawfully. Fair and lawful dealing will be understood as requiring the Retailer to conduct its trading relationships with Suppliers in good faith, without distinction between formal or informal arrangements, without duress and in recognition of the Suppliers' need for certainty as regards the risks and costs of trading, particularly in relation to
production, delivery and payment issues."
We have added various "SUGGESTIONS" which, if adopted, would go some way towards making the supply chain "fairer" for our grower-members.
Whilst we are very pleased that some of our members have noted improvements this year with certain issues, other issues remain unchanged, or, are even worse! For example, a survey carried out by a BIFGA member in March this year, covering ten supermarket chains in the Tunbridge Wells, Kent area, showed that displays of British Gala apples ranged from "excellent" down to "zero" - i.e. no British Gala apples on sale! The main issues are as follows:
1. LATE SETTING OF SUPPLY PROGRAMMES AND SHARE OF THE MARKET
It seems that compared with previous years, some of the major retailers, again last year, unreasonably delayed discussing their buying programmes. Was this perhaps designed to give these retailers a negotiating advantage?
There were also some very late reductions made by some retailers/sales desks (perhaps prompted by forecasts of a lower crop) to minimum size and colour specifications. Unfortunately, these changes came too late to prevent some smaller and less-coloured fruits from being left unpicked!
SUGGESTION (i): Make a public commitment to buying British apples and pears whenever possible.
SUGGESTION (ii): Agree overall apple and pear supply programmes by the end of June each year, followed by agreement on specifications and prices soon afterwards.
SUGGESTION (iii): Agree with suppliers "imaginative promotions" (not just price cuts!) to herald the arrival of the new season, new varieties, and "seasonal" varieties.
2. UNREASONABLY RESTRICTIVE SIZE REQUIREMENTS
Fortunately, with some supermarkets, there has been a long-overdue improvement with this issue. This is most helpful because no two apples can be exactly the same shape, size, and weight, yet, in the past, some buyers have set specifications that could only reasonably be expected with a manufactured product.
To avoid waste, and to maximise sales, growers really do need to be able to sell all sizes, but without giving away too much "unpaid-for-fruit", which sometimes occurs with pre-packed fruits.
Perhaps greater use could be made of the Government's official size band range: "10mm for class 1 fruit packed in sales packages or loose in the package".
SUGGESTION (i): Discuss with suppliers/packers, and growers, ways to reduce the "give away" (resulting from unpaid-for-fruit in pre-packs), caused by lack of flexibility in determining sizes, bands, counts, and minimum pack weights.
SUGGESTION (ii): For main apple varieties (e.g. British Gala), display a crate of each of small, medium, and large fruits (all offered at the same price per kilo) for customers to select as required. This might prove to be very popular with families (especially those with young children) who might like to buy a mixture of sizes at the same time.
3. UNREASONABLY RESTRICTIVE COLOUR AND OTHER "QUALITY" REQUIREMENTS
Some retailers have set unreasonably high colour, and other quality requirements, resulting in perfectly sound apples being rejected in orchards and packhouses. Understandably, growers can be very upset about this because it can massively affect their returns.
If members of the public were to see this waste, perhaps they also would be upset! Fortunately, this season, some retailers have lowered their colour requirements, apparently without significant "kick-back" from consumers.
SUGGESTION (i): Reduce colour requirements further, allowing a larger percentage of the crop to be sold retail.
SUGGESTION (ii) Allow some reduction in minimum pressures (not everyone enjoys eating really hard apples!).
SUGGESTION (iii) Look again at minimum brix levels - a minor reduction might not be noticeable, but it could significantly reduce waste in borderline cases.
4. UNNECESSARY PACKAGING
Leaving to one side the issue of "plastic" bags and their potential adverse effects on the environment, the move to sell more fruit in pre-packs has resulted in large sections of fruit displays looking like a "wall of plastic"! Although these packs may be convenient for the consumer, the displays can hardly be called "attractive", and this could be a factor behind slow fruit sales.
Another issue is that some supermarkets seem to make unnecessary changes to packaging and labelling. Such changes are not only a very costly burden on growers/packers, but the wastage created is likely to have a significantly adverse environmental impact.
SUGGESTION (i) Consider selling fruit in recyclable cardboard/pulp punnets, so that the fruit is more visible.
SUGGESTION (ii) Sell more fruit loose as this would greatly reduce the amount of packaging used, and allow consumers to play their part by taking their fruit home in their own re-usable bags. Perhaps, retailers, the Government, and consumers, really do need to "have the conversation" about whether they are pro, or anti, "plastic" pre-packs!
SUGGESTION (iii): Avoid changing pack sizes, and, when it is absolutely necessary, allow a longer "use-up" period.
5. RESTRICTED RANGE OF VARIETIES
It was only a few years ago, that some supermarkets were competing with one another to see which could offer consumers the largest range (spread over a season) of varieties of UK apples and pears. In some supermarkets, the range extended to around 50 varieties. Today, in some supermarkets, one could be hard-pressed to find much more than a dozen or so UK varieties. Why? Britain has a proud
history of growing some of the finest apple and pear varieties in the world, and although some have dropped by the wayside for good commercial reasons, too many popular varieties have been grubbed up due to "delisting" by some supermarket buyers.
Such decisions could cost growers tens of thousands of pounds, especially if they have to grub-up and replant whole orchards. Likewise, some retailers appear unwilling to try some new varieties, often citing lack of shelf space as the reason.
The net result of this lack of certainty is that many growers have refrained from planting some exciting new varieties, preferring instead to stick with just a small number of existing varieties which they feel will have a ready market. Once again, it is ultimately the consumer who loses out through lack of choice. Equally some potentially more environmentally-friendly varieties which are more resistant to diseases, are being left unplanted, possibly due to lack of support from some of the retailers.
Perhaps more importantly for growers, is the severe financial impact that de-listing varieties can have. Not only does good land cost in the region of £25,000 per hectare to buy, it also costs up to £30,000 per hectare to plant! Not only that, unlike some other crops, it also takes years to get that land back into full production.
SUGGESTION: Have a "New Releases" range where retailers would undertake to sell newer varieties for (say) at least five years after the variety's general release. Such a commitment might help encourage growers to go ahead and make the huge investment required. Likewise (based on feedback from farm shops), some consumers prefer a "softer apple", so consider putting signs on relevant apples
indicating that they have a "softer bite". This could result in sales which otherwise might not be made
6. LIMITED CROP PROTECTION PRODUCTS
BIFGA believes that the "already-too-short" list of crop protection products available to UK growers, should be left for the Government's Chemicals Regulation Division (CRD) to decide on, so that there is only one list for growers and their agronomists to work from. With seemingly ever more fragile supply chains (emphasised during the COVID19 pandemic, and recent world events) it would appear risky for any retailer to preclude potential suppliers (for up to 2 years) just because they had used a (albeit fully-approved) crop protection product that was not on the retailers own list. Active ingredients and maximum residue levels really should be matters for CRD and manufacturers to determine, rather than retailers, who, in any case, can raise any concerns that they have about a particular product, with the CRD.
SUGGESTION: Work with CRD, crop protection manufacturers, and agronomists, to produce just one list of "approved" products. This would help both growers and agronomists, and, from a commercial point of view, would mean that, potentially, all fruit could be sold to all retailers.
7. FARM ASSURANCE SCHEMES AND AUDITS
There is great, ongoing disquiet amongst growers and packers about the ever-increasing burden of farm assurance schemes and their associated audit requirements. With the possible exceptions of financial returns, the weather, and, labour problems, farm assurance schemes are probably the most complained about issue. As well as the stress involved, there is an inherent unfairness in the system, in that those imposing the requirements are not contributing to the costs, with nearly all of the costs falling on growers and packers.
Farm Assurance Schemes were originally introduced for food safety reasons. Additional schemes have since been introduced concerning environmental, ethical, employment, and other issues. The scope of these schemes seems to be constantly widening. There is often overlap between schemes, and seemingly, no control of the items included, so more are added each year. There appears to be no
proportionality given to risk levels. The annual inspections cause great stress for growers and packers, and, rather than being helpful, some inspectors seem to search for problems. A different, more helpful, attitude needs to be introduced, immediately.
The costs to growers of farm assurance schemes are constantly increasing, and it appears that UK growers are being disadvantaged compared to overseas competitors on some issues. BIFGA believes that farm assurance should be kept to the absolute minimum, organised by the Government (perhaps as part of the new Environmental Land Management Scheme -ELMS), and audited by existing national and local government bodies.
SUGGESTION: Those supermarkets wishing to demonstrate to consumers that they are doing everything possible to curb inflation by cutting-out all unnecessary costs, should support BIFGA's campaign for "rolling back farm assurance schemes".
8. THE FUTURE OF SMALL FAMILY FRUIT FARMS
In July 2021, Prince Charles spoke of the need to preserve small family farms, and BIFGA would like to know which of the major retailers are working on plans to make it easier for more of our members to deal directly with them?
Small family fruit farms are under huge pressures due to excessive rules and regulations (easier for larger farms with management staff), which can be off-putting for potential successors. Politicians and retailers should realise that these smaller farms are a very valuable part of the countryside, and, of the fruit industry in general, because they often use contract storage, packing, and growing services provided by larger growers. It is also worth noting that innovation often starts on smaller farms.
SUGGESTION: Cut out all unnecessary red tape, such as that found with some farm assurance schemes; also (for those who have them), have a much simpler packhouse audit, tailored to suit the size of the enterprise concerned.
9. CLIMATE OF FEAR
Despite significant changes to retailing caused by the ongoing Covid19 pandemic, including the increased popularity of farm shops, box schemes, and a stronger demand from wholesalers, the buyers of major multiple retailers still hold the "key" to the fortunes of many growers. Accordingly, there is still a "climate of fear", this even though the number of retailers who need to comply with GCA rules has
increased recently to 14. The relationship between large retailers and grower-suppliers can be difficult due to the imbalance of power. Marketing desks and packers are also very dependent on smooth operations and continued business, so they too are very reluctant to raise issues with retailers.
On a very positive note, however, the GCA has wide-spread approval as an impartial body, which is positive for suppliers, retailers, and consumers alike. BIFGA is an umbrella organisation for top fruit growers, which has forged links with the GCA, and helped improve communication throughout the supply chain, and this needs to be encouraged and developed further.
SUGGESTION: BIFGA believes that it would be better for consumers and others in the supply chain, if supermarket buyers worked much more closely with individual growers, and adopted a more flexible way of working with them. This would lead to a better and greater understanding of the many problems that growers face on a daily basis, and the fact that growers are not only unable to control unforeseen events such as the current pandemic, but that they also can do very little (economically) to mitigate the problems caused by extreme weather, such as frosts, hail, drought, floods, gales, etc. Retailers also should work with growers to reduce all unnecessary red tape, as this only adds to costs.
10. SHARE OF THE CONSUMER'S POUND
BIFGA realises that the remit of the GCA does not cover prices, but we do wonder if "share of investment" and "share of risk" might come under the general heading of "fairness". Accordingly, in 2019 BIFGA carried out a survey "Fairness" in the British Gala Apple Supply Chain - "Pound-a-Pound the Galas"!! - copy available on request.
The conclusion of the survey was that, whilst it is the producer who makes most of the investment and takes most of the risks, he/she receives the least of the consumer's pound - this surely cannot be fair, especially when one considers that unlike some others in the supply chain, producers only have one opportunity each year to make a return on their investments. There definitely needs to be a more equitable sharing of the "consumer's pound"! We are planning to repeat this survey later this summer.
Click on English Apple Man Journal for 10th June
SUGGESTION: Strive for greater efficiencies throughout the supply chain, and make sure that any savings will benefit the primary producer. This is not a "Cry Wolf" situation. If primary producers do not soon get a fairer share of the consumers' pound, they will simply sell-up, or turn to arable, or other easier-to-grow/sell crops!
THE FUTURE - WORKING TOGETHER
Covid19, and recent world events, have clearly demonstrated that much more resilience is needed in the UK food supply chain. British apple and pear growers in particular, due to the long-term nature of their investments in new orchards, also need to feel confident that everyone in the supply chain recognises that fruit growing must be financially sustainable.
Following the very successful BIFGA Farm Walk, held at Plaxtol, Kent, in July 2021, which was attended by the GCA, and his team, together with representatives from 8 of the UK's leading supermarket chains, BIFGA decided to organise another similar event, to be held near Hadlow, Tonbridge, Kent on Wednesday 8th June 2022.
This event was again open to "non-members" who, if they were able to attend, were requested to contact the BIFGA Secretary for details about registration.
We do hope that our comments and suggestions are helpful, and will be considered very seriously by everyone in the supply chain, with more positive action taken whenever possible. We would, of course, welcome any feedback to pass on to our members.
John Breach - BIFGA Chairman.
The English Apple Man Comments:
The BIFGA statement carries great detail of issues affecting apple & pear growers and it was my decision to publish it in full as any abbreviation from editing would undermine the importance of the message.
That is all for this week
Take care
The English Apple Man