June 26, 2018

Industry Push Back Against New Kroger Payment Policy

Kroger sent out a letter to shippers recently announcing their new August 1, 2018 standardized payment terms of Net 90 days. The new policy directly conflicts with protection rights under the PACA Trust. Agreeing to any extension beyond 30 days permanently waives the PACA Trust protection for any produce supplier.

Since receiving this notice, Western Growers has coordinated a coalition of regional and national associations to encourage a unified push back against this announcement, with the goal being to garner as much public attention on this situation as possible. 

Although Kroger has since indicated “flexibility” for produce suppliers, it is in our best interest to urge Kroger to make an official announcement rescinding the policy with specific clarification stating the policy does not apply to fresh produce. Kroger plans to talk with suppliers about payment options, however, the only acceptable option is coverage under PACA Trust terms and payment consistent with those terms.

Western Growers views this request by Kroger as establishing a dangerous precedent and potentially the beginning of similar demands by other buyers. While WG is pursuing all efforts to obtain the only acceptable outcome, which is to have the policy rescinded, all fresh produce sellers need to show a unified stance in writing Kroger declining the 90-day terms as unacceptable. Together, we must do the right thing and strive to preserve the PACA Trust rights for the produce industry. 

If you have any other questions, please contact Matt McInerney at (949) 885-2263 or Ken Gilliland at (949) 885-2267.