The Delta Produce bankruptcy story and $100 million lawsuit charging H.E. Butt Co. with unethical business practices makes for some scintilating reading.
But it’s a sad look at a supplier-retailer partnership gone wrong.
The lawsuit and bankruptcy will play themselves out, and we’re not in a position to determine whose set of facts is correct, but it seems pretty clear that Delta and H-E-B, both of San Antonio, didn’t view their relationship as a partnership.
That’s not to say that method is always the best way or only way to do business.
But it’s a good way in fresh produce.
The produce industry goes back a long time and prides itself on being the kind of business where competitors can help each other and sit on the same commodity or association boards, and deals are done over dinner and drinks and handshakes.
Indeed, much business is still done that way, and it makes the produce industry the kind that pulls people in for their career.
But there are still situations like these, where bankruptcies shut companies down and scandalous accusations are made in nine-figure lawsuits.
Suppliers and buyers should recognize signs that a relationship isn’t going in a healthy direction.
If the lawsuit is accurate, that H-E-B forbade Delta from selling to H-E-B competitors, resulting in as much as 95% of Delta’s business going to H-E-B, it’s not a stretch to say that’s not a healthy business position.
Good business relationships allow all companies involoved to profit. Ones that don’t, are unsustainable. Deep down, successful business leaders know that.
Did The Packer get it right? Leave a comment and tell us your opinion.