Several produce industry groups are voicing displeasure about Kroger's 90-day payment policy, set to kick in Aug. 1. ( File photo )

Kroger’s new 90-day payment policy has brought more criticism from produce groups, with the California Fresh Fruit Association expressing “extreme displeasure” and a group representing wholesalers saying it is “deeply concerned.”

Both groups cite concerns of how the policy affects suppliers’ Perishable Agricultural Commodities Act protections. Kroger recently sent a letter on the new policy to suppliers. It is scheduled to go into effect Aug. 1.

The National Association of Perishable Agricultural Receivers (NAPAR), Washington, D.C., which represents produce wholesalers, said suppliers who comply with the 90-day standardized payment policy will automatically lose PACA protections.

NAPAR Chairman Matthew D’Arrigo, vice president of D’Arrigo Bros. Co. of New York, cautioned members to “proceed with extreme care” in a news release.

“Agreeing to any retailers’ 90-day payment policy would forfeit their rights and protection from the PACA trust,” he said in the release. “This is not a decision to be made lightly and may not be good business practice.”

D’Arrigo called upon Kroger to exempt fresh produce suppliers from the policy.

“It may be a workable policy for the many non-perishable suppliers Kroger has, but providing fresh produce is a very different business,” he said in the release.

The California Fresh Fruit Association on June 25 also weighed in on the issue.

“It is inappropriate, if not illegal, to force suppliers to forfeit their rights under the (PACA), an act created specifically to protect the perishable fresh fruit industry,” George Radanovich, the president of the association, said in a news release. “We are very disappointed with Kroger’s decision.”

Kroger, however, has “expressed a willingness to be flexible” on the policy according to the release, but Radanovich said flexibility alone will not work.

“Our industry should not and will not stand for attacks like this,” he said in the release. “The fresh produce industry has been a good partner to Kroger. We hope they will remember that partnership and fix the mess they’ve created.”

 
Comments
Submitted by FlGrower on Tue, 06/26/2018 - 20:14

Kroger if you are willing to pay growers preharvesting expenses then by all means. Ridiculous and anyone who ships to them can only blame themselves once they start slashing their bills. Certainly don't trust that they're going to be flexible, have it in writing. Just sad such a massive grocer to not be able to pay their bills timely. Also their profit margins are huge!!!

Submitted by Dave Baldwin on Tue, 06/26/2018 - 21:49

Fresh produce growers, suppliers and wholesalers need to not supply product to Kroger and the policy will change quickly when their customers can not buy fresroducts in their stores!!

Submitted by don on Wed, 06/27/2018 - 16:17

they have already eliminated many if not most regional distributors from their DC's in order to go direct which many shippers salivated over only to have loads kicked for stickers and other details that local suppliers provide. Narrow the supply chain and demand more from growers. Stockholders get richer and providers and the food supply gets screwed. Buy from locally owned stores and coops who support agriculture not the shareholder..

Submitted by Produce Wiz on Thu, 06/28/2018 - 12:17

90 day terms followed by Chapter 11, then 7. Have to be nuts as any supplier to put up with this. They will break you before they break them selves.

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