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American Food & Ag Exporter

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United/PMA Merger Comes Down To Philosophy And Function

Jim Prevor’s Perishable Pundit, July 30, 2012

Our piece, United/PMA Impasse More Than Just A Decision About A CEO – It Is A Battle For The Soul Of The New Association, brought many comments including this letter:

A very thoughtful article. 

I believe the industry wants one association, primarily because of financial reasons, and I believe one association is really just a matter of time.  However, as you pointed out, philosophy and function are really unresolved issues.

— Jim Carr
President / CEO
Produce Reporter Company
Carol Stream, Illinois

There is little question that if you did a survey, it would overwhelmingly show a preference for one association. If you weighted the survey by produce volume sold, it would be even more so.

Yet, we are not fully persuaded that this means anything at all. It reminds us of surveys that ask whether Americans would like a strong national defense. Yes, overwhelmingly so.

Of course, this doesn’t answer the question as to whether we should keep producing the F-22 Raptor fighter jet, maintain a 600-ship Navy or if we need the capability to defend not only Taiwan proper, but also Quemoy and Matsu — yet making the decision to have a strong defense is, in fact, the making of decisions about things such as this.

Equally, saying one wants one association is fine, but the devil is in the details. This is especially so in the produce industry.

One of the unusual characteristics of the produce industry is that it has vertical associations. The voting membership can run from a farmer to a packer to a shipper to a wholesaler to a retailer or restaurant.  The chairman of the associations can include people such as a representative from a buying organization such as a hotel chain.

This is quite unusual. If you think about FMI, NRA or WGA, these are all horizontal associations with membership defined by business classification.

When Jim Ratliff of Hilton was Chairman of PMA in 1993, it was uneventful. After all, Joe Brennan of Marriott had been chairman back in 1984, yet that was quite extraordinary. Yes, hotels buy produce but they also buy mattresses, and yet it would be hard to imagine the chairman of the mattress association being from a hotel chain.

So, although a representative of a foodservice operator and a grower-shipper may both agree they want one association — the one they each want is likely to be very different from the one the other wants.

If the details are laid out — they just might decide they want two.

Many thanks to Jim Carr for weighing in on this important industry issue.

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