It was reported earlier this week in The Telegraph that garden and houseplant retailer Homebase has sent a letter to its suppliers in which it demands a 2 per cent turnover rebate for orders placed on and from 1 March.
The letters also apparently say that the retailer will "take this opportunity to discuss and agree with you proposed changes to the existing payment terms". At 60 days, these terms already leave growers with one of the longest waits for payment for product they’ve already supplied.
Horticulture adviser Chris Hartfield said: “Following challenging trading in recent years, with weather causing havoc to production and impacting on demand, this action by garden and houseplant retailers will come as a low blow for growers.
“If this was happening with edibles, we suspect it would attract the serious attention of the Groceries Code Adjudicator. When retailers ask suppliers to support their business with increased investment, through mechanisms like rebates, the question is whether or not this is a two-way street, which enables growers to also create businesses that are sustainable in the long term.
“We believe that currently too much of the risk in this supply chain sits with growers, and this is why we’ve worked to produce a code of good trading practice, which aims to promote more sustainable trading relationships for flowers and plants. We would welcome the opportunity to discuss the code with retailers.”
The inequality between the power of the retailer and that of their supplier means it is pretty impossible for growers, individually, to challenge this type of action. Unless and until buyers appreciate the long lasting effects of such action on their suppliers' businesses, the trading environment will not improve.
BPOA chairman Ian Riggs said: “Regrettably the reality is this arbitrary action can be imposed without proper discussion or negotiation with grower suppliers, as contract prices have already been agreed. For most growers this will effectively hit as an additional retrospective rebate.
“Adopting the principles of the NFU/BPOA code of good trading practice for flowers and plants would ensure that such measures would need prior-agreement between all parties and would ensure that declining to implement such measures would not result in impacts on existing commitments. This case is a compelling reason for growers to work with the BPOA and NFU to ensure the principles of the code are adopted."