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Pundit’s Mailbag — Making The Grade

So much of what we do here at the Pundit is on the level of industry policy that it is refreshing to sometimes try to clarify a specific business issue. This letter gives us an opportunity:

I have a question or issue, if you will, that I’d love to see YOU address.

Simply, why does Greenhouse product coming from Mexico come under an agreement where you can’t get NO. 1 product, but Canada you can? I bought a load of GH Beefsteak Tomatoes that failed better than 20%.

I bought it from a company doing business in the USA. My PO indicates US NO.1. I’m told I must pay this file in full???

What makes Mexico exempt but Canada must meet US NO. 1??

— Mike Gianatti
Executive Vice President
Quality Sales
Hartford, Connecticut

Of course the key to being a good Pundit is having really smart and accomplished friends. We’re pleased to count among them Al Vangelos. In fact, the Pundit stares all day at a photo of Al, during his term as Chairman of United, standing with the Pundit as we launched a long ago venture called The Retail Institute.

Alexey Gordeev, President Putin’s Minister of Agriculture, officiated in the ribbon cutting opening the newly added facilities at the Produce Distribution Center in D’mitrov, 40 miles north of Moscow.

The distribution center was developed and is owned by the Russian Farm Community Project. They pioneered the first ever “Russian” branded produce that is in distribution throughout Moscow supermarkets and expanding to other markets.

Photo (l to r) Al Vangelos, Chairman of the Board Russian Farm Community Project, Valerie V. Gavrilov, Head of D’mitrov Administration (Governor), Alexey Gordeez, Minister of Agriculture Russia, Andrei Danilenko, Pres/CEO Russian Farm Community Project.

Al was CEO of Calavo back then, but he has been a big wig with Dole, a director of both Sun World and Ready Pac, chairman of a farm project in Russia (see photo above), a leading consultant and, the reason the Pundit called him: he is now the Chairman of BC Hothouse Foods, Inc.

Al got together with BC Hothouse executives as well as with Tom Demma, President of the BC Vegetable Marketing Commission, and gave us this explanation:

Canada does not have to meet US No. 1 grade, but any producer that puts US No.1 grade on their carton has to meet US No. 1. If the carton does not read US No. 1, then it does not have to make the grade, thus it does not fail.

The shipper must be informed of the requirements prior to the shipment. Just having it on your PO means nothing unless it was stipulated, preferably in writing. At that point, it would probably be a PACA issue.

That clarifies that. Many thanks to Mike for raising the issue and to Al, the folks at BC Hothouse and Tom Demma for helping us resolve it.

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