If ever there was a week to hammer home the message that change is needed, it’s been this week.
I attended the GCA (Grocery Code Adjudicator) annual conference on Thursday and chaired the NFU National Horticulture & Potato board meeting earlier in the week. Both days the message was clear. The behaviours of retail buyers continue to be a source of pain for many grower businesses.
We’re into October now. Some have all but finished, others ramping up or yet to start. Only this week, I’ve heard from several businesses that, despite opening negotiations months ago, retail buyers have still yet to commit to supply agreements, volumes, or prices – and their crop harvest is only around the corner.
In the case of field crops and salads; agreements should be in place before a crop gets planted. The imbalance of power and the financial risks associated with horticultural businesses are stacked against us.
The GSCOP (Groceries Supply Code of Practice) does little to address this type of behaviour.
As one grower said in a recent NFU negotiation training day, “they’ll dangle you over the edge of the cliff, if they have to, to get a lower price”. I fear many are doing just that, right now.
Its for this reason why it is critical that the upcoming Defra supply chain review must investigate behaviours across the entire supply chain if we are to fully achieve fairness in the supply chain.
Issues to be addressed
There is a risk that Defra does not including retail behaviours within its scope of the review, because “GSCOP is already in place, and the government won’t duplicate regulation”. If this were the case, Defra will have missed the point. They would risk glossing over fundamental problems that places our horticultural supply chain at breaking point.
I am not dismissing the good work and progress that GSCOP and the GCA has done since its inception. Nor am I dismissing the support the retail sector has given to drive innovation within our categories or invest in our products. But there is work still to be done to address both GSCOP issues, and non-GSCOP related issues if we are truly to grow the horticulture sector.
The Defra supply chain review must produce outcomes that will build and strengthen GSCOP.
Buzz words like ‘food security’, ‘security of supply’ and ‘trusted partnerships’ are all too often used by senior leadership when speaking on public platforms like the GCA conference, or indeed their own supplier conferences. I expect they do have good intentions behind these statements; they cited the fragility of our fresh supply chains was very real to them earlier this year.
Defra must look at the bigger picture
But here’s the problem. There is an ever-expanding gulf between these warm words in public, and what happens at the coal face with buying managers, category managers et al. Whilst the GCA is working to address the very high churn of new buyers and the lack of engagement on CPI requests, Defra’s review must look at the bigger picture here.
At the GCA conference we were told we needed to accept that: because of their career profiles, buyers might only be in post for 18-24 months. I do not accept this; can you imagine if the suppliers applied this same principle to their sales teams? The market would be in chaos!
Only business certainty will bring security. Contractual agreements for 1 year or 1 season do little to build the confidence of growers whose production cycles are 2, 5 or even 10+ years. Closer alignment of supply agreements with production cycles and long-term strategies is what partnership really looks like and is well needed in our sector.
Only that way will businesses (and banks) have the confidence to invest in food and supply security.