Kroger sent a response today in regards to a letter from the USDA’s PACA Division Director, Judith Wey Rudman. It states that produce suppliers under PACA are not required to participate in the Net 90 payment terms. This, following a unified push back against Kroger’s original announcement about the policy, would have directly conflicted with protection rights under the PACA Trust.
“Western Growers is gratified and appreciative that Kroger, after listening to their suppliers, has agreed to rescind the implementation of the announced 90 day policy,” said Matt McInerney, Western Growers Senior Executive Vice President. “We also want to acknowledge the associations across the country who unified together and provided the business rationale for why the announced policy would not be in the best interest of farmers and sellers of fruits and vegetables. Finally, we want to acknowledge USDA/PACA for taking an active outreach role with Kroger which resulted in the letter rescinding the policy. As we continuously articulated, PACA trust rights are never negotiable.”
Kroger’s letter reads as follow:
“Dear Ms. Rudman,
Thank you for your letter dated June 25, 2018.
Kroger has always had great relationships with our suppliers. We view them as essential partners for shared success.
Our produce suppliers received a letter outlining our recently-modernized payment terms and supply chain finance opportunity. We’ve shared with individual produce suppliers that we will respect existing contractual and legal mandates including PACA. We never intended for PACA-eligible produce suppliers to waive their PACA Trust rights.
At the same time, we’ve welcomed and listened to feedback from our produce suppliers and other important stakeholders – including yours.
I’d like to take this opportunity to clearly state that produce suppliers protected under PACA are not required to participate in Net 90 payment terms. For those PACA-eligible produce suppliers who are interested, we will continue to negotiate for payment terms that are permitted within their PACA Trust rights.
I can be reached at (number redacted by request) and would be happy to answer any further questions you may have about our payment terms of supply chain financing.
Matt P. Hodge, CPSM
Sr. Manager, Sourcing Finance
The Kroger Co.”
If you have any questions, please contact Matt McInerney at (949) 885-2263.
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