The British Protected Ornamentals Association's (BPOA) new code of good-trading practice could save growers from going bust in the same way new relationships between milk producers and supermarkets have saved dairy farmers from closing down, says the NFU.
Administrators' reports on Merediths, Porters and Orchard Nurseries have all blamed cancellation of orders by large retailers including the Garden Centre Group and Morrisons for their financial woes, as recently reported by HW.
NFU group the BPOA said it hopes the Code of Good Trading Practice for Plants & Flowers will help suppliers in the £1bn wholesale industry and their customers to create "mutually advantageous working relationships that meet market requirements and customer needs, and will help establish contractually agreed standards of fair and acceptable behaviour".
BPOA chairman Ian Riggs said the feeling from big retail buyers currently is: "It's not our problem. That summarises the problem."
NFU vice-president Adam Quinney said: "It's not about growers versus retailers. It's about basic contractual relations so suppliers and retailers know where they stand. The risks and rewards were not shared equally throughout the supply chain.
"Existing buying practices place unfair burdens on growers. Horticulture is seen as a high-risk, low-reward. It needs to stop lurching from one season to the next."
He said the dairy sector is in a similar position to horticulture but a voluntary code helped. "There is now a sustainable relationship between retailer and producer in milk. The retailer gets interested when they see you stop producing."
Ornamentals were overlooked by the statutory Grocery Supply Code of Practice (GSCOP) and adjudicator Christine Tacon sees plants as outside her remit. Quinney said a voluntary system could be an advantage to growers, rather than one "forced upon" them.
Big retailers declined the opportunity to speak at the code's launch, but Waitrose applies GSCOP to ornamental growers and the NFU has sent Homebase the code.
Garden Centre Association interim chief executive Ian Wylie represented retailers at the launch. He said: "We need to add value and work out sensible levels of production and supply."
Blue Ribbon owner Walter Back said a retailer refused a 4,000-trolley order at the last minute. "They hide behind terms and conditions until they issue a purchase order," he added, and terms and conditions are not sent until sowing time, when it is too late. He said growers should get compensation.
Double H commercial manager Gary Shorland said he might be at a disadvantage if he uses the code and competitors do not. Dairy is a commodity while ornamentals are more diverse so not comparable, he added.
Former Sainsbury's food buying director Ian Merton said it could help buying relations but not if it is "constraining", and retailers may extend GSCOP terms to horticulture if growers asked.
In the event's MorePeople seminars, former Lindgarden finance director Alan Bunting said buyers get bonuses by achieving margins. He suggested reducing the specification if a retailer wants to sell at a particular price.
Key advice NFU legal adviser Nina Winter
- If it is in the contract, they can do it.
- The law holds you to a bad contract.
- Verbal contracts are okay.
- Get a contract in writing, with a clear price, termination of contract rights with notice/rights on both sides and promotions agreed in advance.
- Read the contract, use the code of good trading practice, ask questions, negotiate and keep the contract safe.