Fresh Produce Center calls government to take action on long payment periods

This week the Fresh Produce Center (GroentenFruit Huis) represented Greenport Holland at the round table discussion of the Standing Committee for Economic Affairs of the House with the following theme: late payments from large corporations to MKB and freelancers. Members of Parliament Mulder (CDA), Ziengs VVD), Houwers (Houwers fraction), Graus (PVV) and Vos (PvdA) received seven industry organizations including the Fresh Produce Center. "It cannot be that a fresh product is sold and the supplier has to wait at least 60 days for his money; and this is happening in times when it is harder to get a loan from banks," says Suzanvan Kuppeveld, Market Policy officer at the Fresh Produce Center.

In the fruit and vegetable sector many purchase and sales transactions take place between the producer or growers association and the trade sector on one side, and between the trade sector and customers on the other side. A payment term of 60 days or longer in the chain between the trade sector and the customer is nothing out of the ordinary. Agnes Mulder asked Suzan van Kuppeveld from the Fresh Produce Center how negotiations over contract terms play out in reality. It was indicated that there is little room for negotiations. Competition is fierce and providers are afraid of losing their customers. Late last year the Fresh Produce Center supported it's members by giving a workshop about offering other contract terms. The workshop was well received, but appears to have provided little solace.

Dion Graus asked whether tariffs would be raised to finance the defaulting of payments. According to Van Kuppeveld that is not the point. It is hard to compete on price. The problem lies in the long payment periods. "From an economic standpoint, it is very unreasonable for a payment period to be at least 60 days for a fresh product that only lasts for about 7 days. Long payment periods have a negative impact on the innovative and financial strength of companies in the fruit and vegetable sector. The Fresh Produce Center has asked the government to work with them in thinking about how this problem can be solved. Adaptation of the law is an option, for example; introducing abuse of economic dependence in the Competition Act. Van Kuppeveld indicated that the sector is also open to a form of self-regulation, for example, via an agreement or via the joint drafting of an agreement on (some) general purchasing conditions.

The Fresh Produce Center believes that it is urgent to resolve this long standing problem. Companies benefit from innovation and effectiveness. Abolishing the pledge ban would be positive. The Fresh Produce Center is not alone in this. The bakery industry, confectionery industry and metal sector also made an appeal to abolish the pledge ban.