Kroger Responds to Industry Concerns Regarding Proposed Payment Terms
Thursday, July 12, 2018
Posted by: Ellie Watson
On June 19, The Kroger Company informed grower/shippers of a new NET 90-day payment terms, scheduled to begin August 1. This new policy directly contradicts grower’s rights under the Perishable Agricultural Commodities Act (PACA) trust. Any grower/shippers accepting these terms will violate their rights under the PACA trust.
Reaction to this proposed policy created extreme concern on behalf of the produce industry across the nation. A Georgia produce coalition letter was sent to Kroger on behalf of GFVGA, Georgia Agribusiness Council, Georgia Farm Bureau, Georgia Peach Council, Georgia Watermelon Association, Georgia Blueberry Growers Association and the Vidalia Onion Business Council. (Click here to view letter.) Many other associations including United Fresh, Western Growers and the National Watermelon Association have voiced concern to Kroger and the USDA regarding this proposed policy.
In response to these concerns, Kroger issued a letter to the USDA PACA Division and clarified their Net 90 payment terms on July 9.
“I’d like to take this opportunity to clearly state that produce suppliers protected under PACA are not required to participate in Net 90 payment terms,” said Kroger Senior Manager Matt Hodge. “For those PACA-eligible produce suppliers who are interested, we will continue to negotiate for payment terms that are permitted within their PACA Trust rights.”
To read Kroger’s full letter click here.
This experience reinforces the unity of the produce industry and the need for all grower/shippers to work together.
“GFVGA is committed to work with other groups and associations in times like these,” said GFVGA President Mike Bruorton. “We are pleased that a win-win solution for our growers was achieved.”
REMEMBER: Accepting any payment terms outside the parameters of PACA (beyond 30 days), will waive your rights under the trust. GFVGA strongly recommends that you retain these rights and ensure you continue to receive timely payments.