07/07/05 Wal-Mart and the produce industry, Pt.3

07/07/05 Wal-Mart and the produce industry, Pt.3

There is no question that when Wal-Mart tried to bring common business practices to the produce industry over a decade ago, their methods were met with a lot of skepticism. For example, sellers of goods stocking Distribution Centers without direct intervention from the buyer. Contracts in which Wal-Mart would buy goods at pre-established prices, instead of shopping from seller to seller to get the least expensive product. That led some growers and sellers in the early days to refuse to sell to Wal-Mart. Some later returned to provide goods for the retail giant. But it has led to the perceptions that Wal-Mart bullies down growers and shippers' purchase prices, all in the name of keeping customers happy and keeping its title as the world's largest retail operation. PETERSEN: A lot of things about Wal-Mart are really not understood by growers. Over thirty years I've been in this business retailing fruits and vegetables. And it's really remarkable when the subject of Wal-Mart comes up, how people think through what this company has become. But Bruce Petersen, Senior Vice President of Perishables, says nothing could be further from the truth. In fact, in his opinion, all things being equal, it places a greater emphasis on how the treatment of growers and shippers play a pivotal role in the company's success. PETERSEN: So we've got the financial resources. We've got the mind set with the consumer. We've got the leadership to continue to grow our company. The only thing that can screw us up is our suppliers, because if our suppliers don't make a profit on us. If our suppliers don't find us relatively collaborative in the things that we do, they will refuse to sell to us. And Petersen will tell you as much as Wal-Mart brags about knowing what the consumer wants, the company also knows what their suppliers of produce and goods need and is willing to oblige. PETERSEN: There has to be a collaborative relationship with our suppliers that does two things. One to assure we get the products that we need, and secondarily that are suppliers can make a profit so they can reinvest into their business and go on and continue to grow, because if our suppliers don't grow we can't grow. Petersen says that Wal-Mart's involvement in the success of produce growers and sellers is not just in the buyer-seller relationship. He says his company also has a keen interest in the success of agriculture as an industry, and finding ways to provide aid in that success. Some examples of that are discussed in our next program.
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