End of agreement brings threat to crisping market
End of agreement brings threat to crisping market
By Philip Clarke
CRISPING potato growers are warning of disruption to the market this season after the termination of business dealings between leading distributor Greenvale Produce and processor Golden Wonder.
As a result of the fall out, over 50,000t of crisping potatoes, originally intended for Golden Wonder, are believed to be looking for a new home.
"We are very concerned that recent problems threaten to destabilise the crisp market," said chairman of the Processed Potato Growers Group, John Clark, who has called for more dialogue between all sectors of the industry.
Problems between Golden Wonder and Greenvale, (both former Dalgety subsidiaries), have been rumbling for some time.
A letter was finally sent by Golden Wonder to growers at the end of June announcing the cessation of business with Greenvale. "That position has not changed and will not change," Golden Wonder purchasing director, Jon Bolton, told FW this week. The letter also invited growers to contact Golden Wonder direct or via other merchants, much to the chagrin of Greenvale.
Both firms refused to expand on the reasons behind the split, saying only that the matter was now in the hands of solicitors who were trying to reach a settlement. But growers say the problems relate to the write down of unwanted stocks of Record and Brodick seed potatoes last season, and the high tonnage of ex-store rejections.
Despite the uncertainty, most growers, who have been fully briefed by Greenvale, have pledged to stand by the distributor. "We are not happy with what has happened," one of them told FW. "But sticking together is the only way anything good can come out of all this. We are aware that the problems really start with the supermarkets who change their specifications and requirements without any regard to the long-term nature of seed and ware production."
In return, Greenvale has written to producers pledging "assistance" for last seasons problems should any marketing opportunity arise with respect to Record potatoes this season. With potato futures already double the contract price, growers are optimistic there may be some respite.
Meanwhile, Greenvale is believed to be still looking for an alternative outlet for most of its contracted crisping supplies.
"Having these excess potatoes floating around affects the whole industry," says the PPGGs Mr Clark. "Even though they will probably find a home, whoever gets them will be a more choosy and aggressive buyer."
Mr Clark added that, generally, relationships had deteriorated within the processing sector, with PPGG members particularly concerned at last seasons rejections.
"In many cases, intake quality controls ignored contractually agreed procedures and showed little consistency in their methods," he claims. "Considerable reassurances on how contracts will be structured in future years will need to be given for long-term storage contracts to be entered into."
One possibility would be to put the name of the ultimate processor on the contract with merchants, Mr Clark suggests, a view endorsed by Golden Wonder. *