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Why Don’t American Retailers Just Standardize On EurepGAP?

With all our pieces on food safety, as we have analyzed dozens of different schemes, we receive this plaintive cry:

Why cannot U.S. retailers simply adopt the EurepGAP standard which covers food safety and worker welfare issues to the satisfaction of major retail chains in Europe and Japan?

Most growers outside the USA already work under these rules, as do several produce exporters, and there are already U.S. inspection companies qualified to issue EurepGAP certificates.

Having a single standard makes life easier for international trade.

— Richard Yudin
Fyffes Tropical Produce
Coral Gables, Florida

Fyffes, an Ireland-based company, is famous for its claim to have had the first consumer produce brand, launched in 1929. It should also be famous for having particularly interesting employees.

We have previously received letters from Dr. Laurence Swan, Managing Director for R&D for Fyffes, and we did an interview with Dr. Swan as well. Much of this revolved around the Food Dudes program that he has championed. We see Dr. Swan has also collected and edited a wonderful book entitled Fyffes: The World’s Oldest Fruit Brand. Click on the cover at left to download it for free.

1929 Prototype    
1996 Onwards

Now we have Richard Yudin writing from Fyffes’ U.S. branch, and he has an interesting background:

Richard Yudin was born in Uruguay of British parents, went to Cornell University in the USA where he took a Bachelor’s degree in Agriculture. Hired by the United Fruit Company, he began work in Costa Rica in 1973, moving later to Colombia and the Philippines, where he married Charisse Perez de Tagle.

He took a Master’s Degree in Business from the Asian Institute of Management in 1979, then went to work for the Standard Fruit Company in Costa Rica and later Colombia. He returned to England in 1985, working with companies trading with Latin America.

Hired by the Fyffes Group in 1990, he went to the Dominican Republic, where he was instrumental in reviving the Manzanillo railway, moving to Costa Rica in 1994 and the USA in 1996 as the company’s logistics manager. Following a life-long interest, he qualified as a Member of the Chartered Institute of Transport in 1992.

Mr. Yudin has written a book on The Railways of Costa Rica, which you can learn about here.

He also wrote a monograph for The Monorail Society, entitled Banana Field Monorails Exist! And you can read it right here.

Now, though, Mr. Yudin writes us about an issue close to his heart: the harmonization of standards around the world. Mr. Yudin specifically suggests the U.S. standardize on EurepGAP, where Mr. Yudin volunteers his time as a member of the Fruit and Vegetable Sector Committee.

Mr. Yudin is particularly focused on driving costs out of the system by getting greater uniformity. For example, he commented on EurepGAP’s new database in this way:

“Our expectation of the EurepGAP database is high since we expect that it will reduce the participation costs of suppliers. If not, every retailer will set up their own traceability system.”

So, why don’t American retailers just standardize on EurepGAP?

Well, first we might ask why Europe doesn’t. When the Pundit was in South Africa last fall, we visited many exporters who focus on the U.K. market. They were complaining bitterly about the various standards U.K. retailers were placing upon them. They made it very clear that every multiple in the U.K. had its own standards.

More recently, Marc DeNaeyer of Trofi in The Netherlands informed us that pesticide residues were now being regulated by the German discounters:

German discounters are now arbitrarily enforcing their own MRLs, which are set at anywhere between 33 percent and 50 percent of the MRL. Today we must have each lot tested for 500 active ingredients — at a cost of €200 per test — and only then does a discounter decide if it buys or not. Remember the days we just fought over price?

This has changed the buying dynamics tremendously, and the effects will be strategically interesting at the very least. Does an operator now pursue a fully integrated supply chain on one hand and is a discounter willing to hand over its strength of flexible spot buying on the other? The answer will likely be that the solutions will be different for each operator and retailer. What will happen is that no longer just U.K. buyers, but now all E.U. buyers, will enforce much stricter codes in the global quest for fresh produce.

So it seems like there is an inevitable push to retail-specific standards everywhere, for the simple reason that few retailers want to be “average” on the issues important to their customers. So when a base standard, such as EurepGAP, is established Marks & Spencer will develop a “Field to Fork” plan to differentiate itself.

Chile set up a program modeled on EurepGAP, called ChileGAP. Now, theoretically, the US could set up a similar program. But look at what ChileGAP encompasses:

There is substantial discord in the U.S. on what is an appropriate food safety standard, and there is zero consensus on things such as “Labor Aspects/Workers’ Welfare”, “Corporate Social Responsibility” and “Natural Energy Resources.”

To an American, it all sounds like a bunch of meddling in affairs that are properly left to individual companies to negotiate on their own. And there’s a deep suspicion that EurepGAP is a way to sneakily impose European perspectives of social welfare on unsuspecting and unwilling Americans.

A company such as Fyffes — indeed most producers — would like one single standard, one single audit, which would make their product acceptable to everyone.

But in the absence of a universal consensus on these matters, and a willingness by retailers to forgo the possibility of higher standards, standardization on EurepGAP or anything else seems far, far, in the future.

Thanks to Mr. Yudin for raising this important issue.

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