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Trust But Verify

Jim Prevor’s Perishable Pundit, March 7, 2007

As large handlers try to persuade retailers and other buyers to restrict their supply chain to only those who have signed on to the California Marketing Agreement, it is easy to suppose that the main issue is standards.

Indeed, we’ve written, sympathetically, regarding the notion that the standards Fresh Express allowed to be published in an article in USA Today were tougher than those being proposed in the industry-wide draft Good Agricultural Practices document.

The truth, however, is that small differences in the standards are not likely to be half as important as the likely differences in the rigor with which the standards are implemented.

And so, the challenge for a buyer today is really that each buyer has the obligation of verification.

From a buyer’s standpoint, what is great about the California Marketing Agreement is that, as part of the Agreement, each signatory extends permission for state inspectors to inspect their property as they see fit.

If we were a regional retailer, this would settle it for us: we would sign on and require that all our suppliers be signatories to the agreement. Why? Simple, the state will do the verification for us, and as regional players it isn’t really realistic for us to do it ourselves.

If we were Wal-Mart, on the other hand, we have options. We could let the state do the verification for us or, if we had a vendor we valued who claimed that they had much higher standards, who said they didn’t want to sign the agreement because they didn’t want to lend credibility to what they perceived as unacceptably low standards, we might want to work with them.

To do so would mean that we would have to take on the verification burden ourselves. We could send in teams of outside auditors, we could have our own staff built up to do audits; we could do a lot of things.

What isn’t an option though is to accept, on faith, that everyone is doing whatever they say they do.

In other words the draft GAPs are standards; they are not the only standards and we would be hesitant to say that if some other company was ISO 22000 certified, third party audited to meet the Woolworths Quality Assurance Standards, the Marks & Spencer Field-to-Fork scheme and the food safety standards of McDonalds, Darden and Disney, we wouldn’t be willing to buy from them.

What is unacceptable, though, is for a buyer to simply accept a vendor’s claims, without verification, that they exceed industry standards.

In the vast majority of cases, whatever the standards are on paper, this claim is unlikely to be true.

Obviously the signatories to the California Marketing Agreement would like buyers to restrict their purchases to signatories. We could live with buyers constricting their purchases to signatories or those independently audited to exceed California Marketing Agreement standards.

So, far, however, with a few exceptions such as Wegmans, Kroger and Markon, all of whom have announced that they will only buy from signatories, we see many buyers unwilling to constrain their supply chain at all.

This is very bad news for the industry as without a willingness on the part of buyers to purchase only from those following safe food standards, the prospects for safer food production are not very good.

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