Reasons For Buyer Reticence
To Commit To Marketing Agreement
Jim Prevor’s Perishable Pundit, March 29, 2007
The Buyer-led Food Safety Initiative is taking a lot of heat because after specifically asking for the establishment of the California Leafy Greens Marketing Agreement, very few of the signatories are willing to commit to buying from only those producers that are part of the Agreement. Most of the signatories are not even willing to commit to buy only from vendors third party certified to meet or exceed the standards accepted by the Marketing Agreement.
It is sad but predictable.
From the very start, there has been a peculiarity about the effort. Why in the world did the buyers need to urge the associations to come up with a plan? If a buyer wants a certain criteria met, he simply has to add it to his specifications.
This is the way the United Kingdom retail community has handled things.
The fact that instead of just setting up standards, the buyers urged the associations to set standards, clued us in right away that many of the buyers both in the Initiative and out, were not actually prepared to do anything regarding safety. They just wanted someone else to do something or they wanted to seem to be concerned about this issue.
It may be unfair to focus just on the signatories to the Initiative, since many who never signed aren’t doing much better, but actions have consequences and these buyers actually urged other people to spend time and money to establish the Marketing Agreement, so they are a fair group to pick out.
What conceivable reasons could there be for them not to agree to restrict their supply chains to either those who have signed the CMA or, at least, to those independently audited to meet CMA standards? Let us think it through:
- They Weren’t Paying Attention
Tim York and Dave Corsi are smart, well meaning and persuasive. Maybe as long as it was just a question of letters, many of the others just went along. They never focused in on the concept that they would have some special obligation of their own to actually do something.
- They Don’t Have The Authority And Don’t Want To Ask Their Bosses Or Their Bosses Said No
Tim York is the President of Markon Cooperative and he is well respected by its members. Dave Corsi works at a family owned chain that takes pride in being top class. When we have guests from South Africa or Australia or other far away places, we always take them to a Wegmans because that is what they want to see. Although the chain is growing, this is still the type of chain where it is expected that Danny Wegman will visit each and every store each Christmas.
Both Tim and Dave have special positions — many of the signatories are neither presidents of their companies nor family owned retailers with a reputation for being best in class.
Maybe many of the others just don’t have the authority to constrain a supply chain and are unwilling to talk to their bosses about it.
Perhaps in some cases they did, and their bosses just said no.
- Pre-existing Contracts
Some of the signatories claim they can’t sign to restrict their supply chain because they have pre-existing contracts. This really makes no sense. Obviously, if they can’t renegotiate their contracts they could just announce that no future contracts will be signed unless the supplier is a signatory to the Marketing Agreement.
- Legal Fears Regarding Standards
Some have speculated that buyers fear once they get in the business of establishing standards they could be liable for suit. This, once again, makes no sense. Every buyer has standards — committing to buy Marketing Agreement product creates no more liability than having the lower standard of saying we will buy from anyone.
- Fear That It Might Cost Money
Restricting one’s supply chain means there will sometimes be cheaper product available…but you can’t buy it. A competitor might sell product grown under less than optimal conditions and beat the price you can offer on the product grown to higher standards.
Our sense is it is a combination of reasons One, Two and Five that hold back buyers from making a commitment.
Yet, if buyers don’t want food grown to high food safety standards enough to commit to buying it, what reason do we have for expecting, ultimately, that producers will produce it?