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.”