Washington, DC – NAPAR, the nation’s only produce trade association that exclusively represents produce wholesalers and receivers, is deeply concerned about a new payment policy that Kroger, one of the nation’s largest food retailers, announced in a letter to its suppliers earlier this month.
Compliance with the retailer’s new 90-day standardized payment policy automatically forces produce suppliers to waive their PACA Trust rights and protections.
The Perishable Agricultural Commodities Act, or PACA, was signed into law in 1984 to protect produce suppliers. It recognizes the unique position of produce suppliers as the providers of a highly perishable commodity. It ensures that they are first in line to receive payment for their produce in the event of the buyer’s bankruptcy. Agreeing to payment terms in excess of 30 days results in the automatic loss of PACA protection. That’s the law.
Many produce suppliers, especially wholesalers and receivers, are small family owned and operated businesses providing highly perishable produce to large retailers and food service businesses. PACA was meant to level the playing field in the produce supply chain. It protects the wholesaler supplying the food industry’s giants.
Matthew D’Arrigo, of D’Arrigo Bros Co. of New York, Inc., and Chairman of NAPAR, advised members “to proceed with extreme care. Agreeing to any retailer’s 90-day payment policy would forfeit their rights and protection from the PACA Trust. This is not a decision to be made lightly and may not be good business practice,” he concluded.
D’Arrigo also called upon The Kroger Co. to exempt produce suppliers from its new policy. “It may be a workable policy for the many non-perishable suppliers Kroger has, but providing fresh produce is a very different business. The process from harvest to sale in the grocery store is short, and produce suppliers need to be paid promptly to cover their expenses.”
About NAPAR:
NAPAR, the National Association of Perishable Agricultural Receivers, is based in Washington, DC. It is the only fresh produce association focused exclusively on and representing the unique interests of produce wholesalers and receivers in the U.S. NAPAR members are some of the leading wholesale receivers in the country. Many are family-owned, multi-generational businesses. http://www.napar.org/
Source: NAPAR, the National Association of Perishable Agricultural Receivers