Packers say they’ll work together to fix industry

KELOWNA – A group of packers have sent a letter to BC apple growers outlining their commitment to work together and offering a number of suggestions to improve the industry.

But the BC Fruit Growers Association says the suggestions are not substantial enough and will ask the province to step in.

The 11-member group includes some of the province’s biggest packers, including BC Tree Fruits Co-op, Consolidated Fruit Packers and Sandher Fruit Packers.

The letter states that packers believe they can collaborate on several activities “that will improve circumstances of the industry and contribute to grower returns.”

BCFGA general manager Glen Lucas says the letter shows that packers are coming together in a way they haven’t in the past.

“The packers have not organized themselves to speak as a group in the past so this is a good thing, but what they have proposed will not stabilize the industry,” he claims.

The packer initiatives include ensuring clear and consistent quality standards to which all packers hold growers; working towards increasing access to key, high-return export markets; and promoting apple consumption by consumers and improving domestic market access.

Lucas doesn’t have much faith in goals that uses language such as “work towards” or “promote,” without any plan of who, how, when and then what.

“These ideas better have some teeth,” says Lucas. “Who would design the quality standards? Who would monitor them? There is no accountability, and no process to enforce standards. Are the packers going to phone up each other and say smarten up?”

A fair price over the cost of production is a key for apple growers.

“I received 18 cents a pound for my Galas this year and my cost of production is over 30 cents a pound,” says Deep Brar, a Summerland grower who farms apples, cherries, peaches and pears.

Quality requires money for orchard management, explains Brar.

“I know growers who had top quality packouts four years ago who are now struggling to invest in the inputs for a good crop,” he says. “I’m grafting some of the Galas over to cider apples and I wonder if I should just take the chainsaw to the rest of them.”

He could plant more cherries but he says apples provide a good diversity to his business.

Grower representation

An apple marketing commission would represent growers in their business, sales and marketing relationship with packers, Lucas explains.

“We understand that some packers are strongly opposed to this, but it will rebalance the power,” Lucas says. “Currently contracts are not negotiated; they are imposed on growers.”

The letter also addresses competition, acknowledging that “more than ever before, there is more pressure and competition in the marketplace.”

But with as many as 35 packinghouses in the Okanagan, Lucas says the industry needs to change to satisfy retailer demands.

“A commission gives the industry the ability to stand up to the retail sector,” Lucas says.

Just five retail groups – Loblaws, Sobeys, Metro, Walmart and Costco – control 80% of grocery sales in Canada, and a divided packing industry helps retailers beat down the price of apples.

“A commission empowers packers to exchange information on pricing and agree on a minimum price, a fair return for growers, something that is currently illegal for them to do,” Lucas explains.

The hundreds of hours of meetings held as part of the province’s tree fruit stabilization initiative last year led to a 40-page report with 19 recommendations that have yet to effect change.

BCFGA says a decision needs to be made for the sake of growers.

“We are tired of all the back-and-forth and the rock-throwing,” Lucas says.

BCFGA plans to ask the government to appoint a mediator to work with all parties and recommend a solution.

“The board will be meeting shortly to develop a formal request to the ministry,” Lucas explains. “We believe a mediator can listen to all parties and make a recommendation to the agriculture minister on how to proceed.”

Lucas hopes a government mediator would recommend a grower vote, free of packer interference, but the BCFGA will accept the mediator’s recommendations, if one is appointed.

“My understanding is that the ministry doesn’t have to hold a vote, they could simply mandate a solution, but BCFGA believes a vote would be best,” he says.