Search for supply chain solution goes on

Relationships between growers and garden centres have been tested this spring, so is there a better way of doing things?

Stock: when orders are rejected, growers have little recourse in UK - image: HW
Stock: when orders are rejected, growers have little recourse in UK - image: HW

Industry experts have suggested the UK could look to the Netherlands if it wants to sort out grower-retailer relationships damaged this spring when garden centres rejected stock as cold weather lingered into May.

Peter Seabrook (HW, 5 July) claimed that British nurseries "are the laughing stock of Europe" because they have no recourse to rejected orders. He said a Dutch grower told him retailers have to accept delivery and pay in seven days - if they default there is a six per cent interest charge on overdue accounts. Then there is the option of auctioning plants at Aalsmeer.

Conferences

Two upcoming conferences (HW, 19 July) will discuss garden retailer-grower relationships. The British Protected Ornamentals Association (BPOA) Build Better Business conference on 9 October will feature a high-profile Dutch grower talking about supply chain issues. And on 21 November, the HTA Seasonal Plant Focus at Young Plants, Stratford-upon-Avon, Warwickshire, will feature Chris Beytes, editor of US magazine Grower Talks, who will explain the evolution of the grower-retailer relationship in America as part of a discussion on how growers and retailers should work together to increase sales.

Beytes will speak about the "big box" end of things, which is just as controversial in the US as it is in the UK.

He says a big factor is that fewer grower-suppliers in the US are able to keep up with big box demands that you service plants sold in-store such as by using shipping racks, pay by scan, payment when sold to end customer and retailer demands. Walmart recently dropped from 22 to 15 suppliers. Those discarded become contract growers or seek regional sales.

Beytes adds: "In the end, the US chain store business has proven to be a hard-knocks blood sport, and any grower who wants to compete has to be brilliantly good at all aspects of business, and not just a good grower.

"As for independent garden centres and their relationship with growers, that hasn't really changed at all in the US. There are fewer independent garden centres than there were 20 years ago. And fewer small growers, too. In that market, the underlying fear is that one of the big growers that got dropped by a chain store will suddenly start selling to independents. But those big guys are set up to sell truckloads, not a few pots at a time, so that's not likely to happen."

At his event, BPOA chairman Ian Riggs says he will look at how "the weather this spring highlighted the vagaries of the way we trade at present".

Dutch advantages

A Dutch grower, who did not want to be named, says there are advantages in the Dutch system: "Supermarkets and garden centre chains order product from growers in the Netherlands and there is never an issue of retrospective discount.

"If the retailer or supermarket chain doesn't take the product as ordered, there's a contractual obligation to pay 40 per cent of the order value to the grower.

"If the grower can't supply, then there's a contractual obligation to pay 25 per cent of the order value to the retailer. They often solve that in the middle so it doesn't go to court. This obligation is governed by Dutch auctions as arbitrators."

He adds: "I find many retailers in the UK say they want to buy local but there are too many reasons why that favours retailers. They can walk away from pre-ordered programmes just like that, leaving growers with unsold stock."

He says he would like to see retailers being more realistic in what they order from the growers, adding that in Holland if growers have too much stock they have "the rest of Europe on their doorstep" as a sales outlet.

He advocates a "more reasonable, realistic and respectful" system, adding: "My biggest fear looking at UK/Europe is the 'grey growing space' - there's not enough youth joining the industry and they will join only if the industry becomes more profitable." He says it is up to trade bodies to sort it out for UK growers.

There is a precedent. Grocery Code of Practice (GCOP) adjudicator Christine Tacon says supermarket chains could face fines of up to £1bn if they bully their suppliers under new rules to be presented to the Government in October. Since June it has had the power to arbitrate on behalf of suppliers in dispute with retailers.

NFU chief horticulture advisor Hayley Campbell-Gibbons will launch an ornamentals Code of Good Trading Practice at the BPOA event. She finds it odd that GCOP does not include plants and flowers but could be used to pressurise buyers to make a voluntary move before a possible extension of the code.

Dutch system - No easy solution for UK

According to Dutch plant exporter Javado partner Chris Campbell, auctions are "not ideal because prices are not set and you have to pay FloraHolland a levy for the privilege". He says that in the UK it is "all down to a wing and a prayer" and that retailers "only order if it is something they want, but you can have second thoughts because events turn against you".

He believes that the UK bedding supply chain is "very good", so the amount of bedding imported from Europe is small. "We can't compete, so we don't tread on the toes of British growers," he says. "Bedding has to be sold to the customer with a good relationship. The answer of how to get through a season we just had? We didn't have an answer to that either."


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