Archive for 'Industry Politics'

I Spy Something You Don’t See And It Starts With ‘C’

AFREA wordle from 7 cooperative principlesI have England on my mind.  I am all for the Europe concept but do we really need to have the Tour de France starting in the UK?  It’s a bit like Kent becoming a wine growing region. Well known paradigms are suddenly getting challenged. England gave us a lot of things and lots of them started with the letter ‘C’. Colonialism, Cricket and Coronation Street come to mind – and, of course, the Co-Operative model. Now there is something we can relate to in this industry of ours. Co-Operatives. Many of ours growers use MG Marketing, a Co-operative, to market their fruits and vegetables. Foodstuffs, the parent brand of Pak’n Save and New World supermarkets is also based on the Co-Operative Model.
Co-Operatives are not the norm these days and typically face stiff competition from their corporate counterparts. In this example that would be Turners & Growers and Freshmax in the produce industry,for example or Countdown in the case of the retail competition.
Well, here is a link to another one of those fascinating Guardian articles. It seems ye olde the Co-Operative model is under a fair bit of pressure in the UK and in need of saving, no less. And what are the champions of the co-operative model advocating? Back to the roots old chaps!  No point of trying to emulate those who are not you!  So, it would be worthwhile checking out this link, where one can find the Rochdale Principles of 1844, the mother, grandmother and greatgrandmother of co-operative movements around the world. And if the movement really needs saving, then lets put a bit of Kiwi flavour into it as well. No point of leaving it all to the Poms!

Horticulture New Zealand – Evolving or Revolting?

hortnz logoThere seem to be some changes afoot at Horticulture New Zealand. Some quite obvious, some not quite so. Andrew Fenton, the organisation’s inaugural president has hung up his shingle as far as that office is concerned, although he is continuing on the Board. Andrew had a good run and worked hard at moulding those two fairly disparate bodies VegFed and FruitFed into one homogenous organisation. Opinion is divided in terms of how successful he was in that. My opinion, for one, is this: Andrew provided solid leadership to Horticulture New Zealand. And leaders are not there to be liked, they are there to be respected. His presidency had to cope with the potato psyllid, kiwifruit PSA, a blurring of lines of how to define a grower, a whole bunch of other issues and a Government which firmly believes that grower pockets are deep enough to pay for part of the country’s Biosecurity incursion response costs. So yes, Andrew was a successful president.

Andrew’s successor, Julian Raine, is a Mainlander, as is the Vice President, one Brian Gargiulo, this well known Banana grower from Christchurch. – At least this is how Brian referred to himself at the speaker’s podium recently.  A remarkable transformation from growing little round green fruit that ought to be red to longish bent green fruit that turn yellow if you know your stuff, but I am digressing. -

Julian is also a kiwifruit grower. He does not just grow kiwifruit, he is also into apples, boysenberries and blackcurrants – but kiwifruit are part of his diversified portfolio. My point being? Well, no one should be surprised about the fact that a kiwifruit grower follows a kiwifruit grower in the presidency of Horticulture New Zealand and if you believe its a coincidence, you probably still believe in Father Christmas and the Tooth Fairy.

I am not complaining and I am sure Julian will also be a worthy leader of Horticulture New Zealand. We just need to understand that with the weighting kiwifruit has in our fresh produce export portfolio, a kiwifruit grower as President is more or less a foregone conclusion, like it or not. What will Julian’s challenges be then? There will be plenty I reckon. Some have been around since Adam was a cowboy, others are raising their head now.kiwifruit payments

I picked up this booklet on ZESPRI  2013 Grower Payments up at the conference and Julian, being a kiwifruit grower himself, will obviously be familiar with the content. The booklet is very well laid out, easy to follow and anyone who reads it  is left in no doubt that the kiwifruit sector is, despite PSA, well organised and displaying all the hallmarks of a well organised industry, where growers know where they stand, how their payments are structured and how excellence is awarded. If one compares this with a broccoli grower supplying local supermarkets at the other end of the scale, one gains an appreciation how diverse the produce industry is and that growers face rafts of differing issues, depending on what they grow, how they are organised and whom they supply.

One of the recent HortNZ weekly e-mail newsletter updates announced the formation of a “working group to look at the organisation’s structure and Board election processes. The group will develop a discussion paper including a description of the status quo and various options for change to enable wider industry discussion.” That announcement relates to the recently published Future Focus report. Two of the fundamental pillars of that report clearly do not sit well with all growers, particularly some of the the larger growers who are very focused on their specific crops and consequently have put a lot of energy into building robust product groups affiliated to Horticulture New Zealand.

A Motion was therefore put to the Horticulture New Zealand AGM in July 2013, Motion 6, entitled PRODUCT GROUPS NOT GROWERS AS MEMBERS OF HORTNZ  which wanted to see individual growers to be funneled into product group membership and product groups being the only Horticulure New Zealand members. The order paper containing all motions is noteworthy for three aspect in relation to Motion 6. Firstly, Motion 6 is the only motion on the Order Paper that starts with a legal opinion – a sign that this is a meaty issue indeed. Secondly, the Explanatory Note accompanying the motion states that only 28% of growers voted in the 2012 Commodity Levy Referendum, suggesting that Horticulture New Zealand “remains disengaged…with approximately 4,000 growers.” If that is correct, then we are seeing an accelerated rationalisation process taking place within the industry.  A successful levy referendum needed to be supported by more than 50% of voting growers and more than 50% of associated production volume. Growers seems to be be further reducing in numbers and the remaining ones are getting bigger and are diversifying into other supply chain functions. Thirdly, this motion can only be seen as a direct challenge to the existing structure and task allocation of the grower bodies, with product groups lining up on one side of the fence and Hort NZ on the other.  Not a pretty sight if it gets ugly.

One of the signs that “ugly” is not too harsh a term to use, played itself out in the Tomato Sector Conference held in conjunction with the main Horticulture New Zealand event. Arriving midway during the morning session, I promptly realised that I had walked into a stoush between growers and the independent sector chair. It seems that the product groups chairs at a meeting earlier in the year decided to place a cap on operating grant applications accepted from local grower associations. Given that it is grassroots growers at local level and regardless of size who are paying the levies to both Hort NZ and their respective product groups, a fair head of indignant steam was being vented by amongst others, the aforementioned Canterbury banana grower.

And do you know what? They have a point. With growers providing the money in the first place, it is a little hard to swallow for them that they should now be limited in funds they can apply for to run their local activities. With any organsiation, a healthy grassroots structure is the critical platform to achieve critcial mass, whether you are a member organisation, a supermarket chain with local branches or a political party with local MPs. What we seem to have here is a national body under attack from product groups wanting to pursue their own agendas; more product groups appointing independent chairs, wishing to inject heightened levels of objectivity, skills sets and professionalism into their performance; and, growers funding both bodies but with reducing ability to pay for their local industry association activities unless they want to dip their hands into their wallets a third time.

Is it a surprise therefore that growers are disgruntled? No! And what’s more – all the above discussed lines of thought are very plausible when assessed in isolation – unfortunately, we are living in the age of global connectivity and isolationism is no longer good enough. Does this need to be sorted? Absolutely? When? Yesterday! Why? Because the common ‘enemy’ is ‘out there’, not amongst us!

And before any grower reader of this column starts wondering why a non-grower like me is getting interested in how Horticulture New Zealand and the issues it faces will evolve, I suggest you head for the this page of the Hort NZ site.  Julian, I wish you well.

David Smith – Pony Finder Extraordinaire

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© 2013 Chattanoogaville.com

Many of you would have heard the following story before, in one form or another…

“One day a scientist decided to run a test on two boys. He took the pessimistic boy to a room full of new toys, telling him that they were all his. He immediately began to cry saying that one day they would all break. He then took the optimistic boy to an old barn which contained a huge pile of fresh steaming horse manure. The boy was immediately excited, grabbed a shovel and began digging in the manure. The stunned scientist asked the boy what he was doing. The boy immediately responded that with all this horse manure there has to be a pony in here somewhere.” (Anonymous).

And we have all been watching the fall out at Turners & Growers with great interest…

Well, if there is one guy in the New Zealand produce industry who has over decades consistently displayed great aptitude in finding the pony, then it would have to be Dave Smith at Freshmax.

Snow Hardy, Terry Brown and now Alistair Petrie are a right little troika of ex T&G ponies to emerge at Freshmax.  I would suggest – watch this space.

And now, for some thing completely different, here is a link to a famous Monty Python sketch, where John Cleese is teaching his colleagues how to defend themselves against being attacked by fresh fruit.  The banana segment is especially worthwhile watching.

Turners & Growers – Timeline Fog Lifts Further

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In April 1970, thirty-three years ago, Foodtown was heading for its 12th store in Auckland, Birkenhead.  Once again, the supermarket chain suggested to Turners & Growers that there might be merit in working together to achieve direct fruit and vegetable deliveries from growers to a Foodtown warehouse for distribution to individual stores.  Jack Turner, who by then had succeeded Sir Harvey Turner as Managing Director felt that “any agreement to arrange direct supplies from growers would be against the wishes of growers…” (Stead, K. One Hundred I’m bid. A Centennial History of Turners & Growers, 1997. ISBN 0473 04169 3. Kestrel Publishing)

The T& G board advised Foodtown that “it was not prepared to agree to its proposal as the board was convinced it would be contrary to the interests of growers, consumers, retailers in general and the company”. (Ibid).

Foodtown responded “that it would continue to try to get whatever fruit and vegetables it could directly from growers themselves.” (Ibid)

And so the battle lines were drawn.

On one hand, the traditional produce wholesale company which had by then successfully been in business for half a century.  In the opposite corner, a business which had barely started a dozen years earlier and already threatened to disturb the industry fabric. Judged from a given point in time in, say 1970, one can understand the Turners & Growers perspective.  The system was working.  It was not broken.  Therefore no need to fix it.

From the supermarket’s point of view though, the system was already beginning to fray at the edges.  Getting produce to twelve stores every morning came with its challenges and being able to take possession of that produce the night before would have been a lot easier as the auction process itself was not very efficient.  Here is a description from the Auckland Fruiterers Association site.

Foodtown therefore quietly continued to build a core group of growers prepared to deliver some produce direct whilst maintaining a daily presence at the auction markets.

to be continued

 

Turners & Growers and Mr Tom Ah Chee

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The Turners & Growers Annual Report for 2012 showed up in the mail today.  I was tempted to comment straight away but I will wait for a while and let it settle.  In the meantime, I shall continue with the missing years in the Turners & Growers timeline.

Fruiterers are innovative fellows and in the mid-fifties one of them, a certain Tom Ah Chee whose family fruit & vegie shop was up on Karangahape Road started dreaming  – and he dreamt big.  So big in fact that when he retired he could look back onto a company that started from the one fruit shop and had spawned 30+ supermarkets in Auckland, Hamilton and Tauranga at the time.  The company was Progressive Enterprises Ltd and the supermarkets were called Foodtown.

A by-product of that growth was what amounted to a fundamental change to the way the produce business was conducted. Change did not happen overnight…but a head of steam started to build from the early sixties onwards and Turners & Growers were right in the midst of it.

In November 1968, the head of steam had becoming sufficient enough to warrant discussion at a special Turners & Growers board meeting. Here is what the then General Manager had to say to the board .

“For the past few years, a new class of retail buyer has become prominent in Auckland.  I refer to the supermarkets.  These have been established for a quarter of a century and undoubtedly have cut across the retail trade in New Zealand as well as in all other coutries where they operate.  For some time now a leading supermarket organisation had been pressing us to arrange sales of vegetables delievered directly from the growers.Up to the present time we have been able to avoid getting involved in that type of business…One of the leading supermarkets is now exercising further pressure and has intimated that if they are unable to get supplies direct from growers through our organisation they may be forced to dela directly with growers themselves.” (Stead, K. One Hundred I’m bid. A Centennial History of Turners & Growers, 1997. ISBN 0473 04169 3. Kestrel Publishing).

Stead then concludes the section discussing the board meeting as follows: “The board discussed the problem for hours and eventually decided to stick to its traditional knitting:  It resolved that it would “…not make any move away from our present auction system that would help to break it down.”

All I can say – opportunity lost.  20+ years later, in May 1989, Foodtown walked.  Why that took so long and how the separation was achieved will be discussed in future posts.