Code targets better protection for growers

Can a new good-trading code win the same protection for ornamentals growers as the groceries code for food suppliers?

Bedding: challenges include cancelled orders as well as tough terms - image: HW
Bedding: challenges include cancelled orders as well as tough terms - image: HW

The £1.6bn retail value UK ornamentals sector has seen tough times recently. At the British Protected Ornamentals Association (BPOA) Build Better Business event at Stoneleigh Park (9 October), chairman Ian Riggs spoke about the poor weather that has hit the industry over the past three years.

But he says it is not just the weather that has seen growers' profitability fall, with some even going into administration (Merediths, Orchard and Porters).

Terms and conditions imposed by "big box" and chain retailers, including order cancellations with no comeback or compensation and demands for various incentives such as promotions to be paid for by the grower, have taken their toll.

Serious impacts

"We have now had three bad years in a row that have had serious impacts on the industry, despite a good summer," says Riggs. "Already this year, we've seen catastrophic impacts on growers of bedding plants because of a mixture of wet and cold weather, poor consumer demand and cancelled retail orders.

"Sadly, some did not make it through. We must ensure a more responsible approach to supply-chain relationships. This code of practice is a stepping stone to a thriving British ornamentals sector."

The BPOA's new Code of Good Trading Practice for Plants & Flowers is designed to help suppliers and customers to "create mutually advantageous working relationships that meet market requirements and customer needs and demands, and will help establish contractually agreed standards of fair and acceptable behaviour".

This is of course not the first attempt to address the issue. At the BPOA launch event, the late Derf Paton got a namecheck for starting the work on a system with an ombudsman overseeing the supply chain. Paton's Pinetops Nurseries used to supply B&Q, but the chain parted company with the lily grower (and others) in 2010.

Pinetops was at the HTA National Plant Show in June looking for new business from independents, manning its first trade show stand in 20 years.

The ombudsman does now exist. Since 2010, the Groceries Supply Code of Practice (GSCOP) has meant that contracts between the top 10 food retailers and their suppliers are regulated to outlaw issues raised in the Competition Commission's grocery inquiry, and offer suppliers the right to independent arbitration should they require it.

Crucially, however, ornamental plant suppliers are not covered. NFU horticulture adviser Chris Hartfield says the NFU campaigned for ornamentals to be part of the GSCOP but was not heard.

European initiative

Now retailers and suppliers have thrown their weight behind a new initiative to improve grocery trading across Europe in the vein of the UK's own GSCOP.

The (voluntary) Supply Chain Initiative is a code of conduct on contractual relationships spearheaded by seven pan-European industry associations. It mirrors many of the GSCOP requirements, but is voluntary. Companies involved include Tesco, Marks & Spencer, Aldi and Lidl as well as major suppliers such as Coca Cola, Nestle and Mondelez.

Perhaps significantly, no big retailers or growers were at the BPOA event. The retailers refused invitations to answer for themselves, while the biggest growers "can look after themselves and don't want to be associated with our issues", one grower speculated.

Middlemen and GSCOP adjudicator Christine Tacon turned down the chance to put across their views.

The fast-moving consumer goods industry, and particularly grocery companies with less-perishable goods than growers, can also deal better with retailers' demands, according to delegates.

NFU vice-president Adam Quinney suggests that having a voluntary code may be an advantage. Most growers are frightened to speak about the issues they have with retailers for fear of losing contracts for ever, he adds.

Quinney says the BPOA code is non-confrontational so loss of trust should not be an issue. "This is about putting into place some very basic contractual relationships so that suppliers and customers know where they stand," he explains. "It is not about growers versus retailers or about putting biased arrangements in place.

The milk industry has sorted out its issues with retailers using a similar code, adds Quinney.

Some retailers use GSCOP for everything. Waitrose told HW: "GSCOP regulations do not apply to the horticulture industry, but we abide by them for all horticulture purchases."

NFU chief legal adviser Nina Winter concludes that growers need to read the small print on contracts - and the BPOA code gives advice on how to do this.

Ornamentals events Discussing the issues

The next event in the calendar is the HTA Seasonal Plants Conference on 21 November at Young Plants in Warwickshire, where the HTA hopes growers and retailers will discuss the issues further.

The Garden Centre Group plant buyer Nicky Roeber will speak on click and collect and what the company's requirements are from suppliers.

Cresco Horticulture managing director Graham Dunn will look at the opportunities growers face when trading with supermarkets.

Meanwhile, YouGarden's Peter McDermott will speak on multichannel retailing. Boyd Douglas Davies and Nigel Judd will also speak.

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