Challenges for fresh vegetable

producers : case of Brittany

A WIDE AND MULTIPRODUCT RANGE OF VEGETABLES

NOVEMBER 2013

Fresh vegetables

(600 000 T)

320 Millions €

Early potatoes potatoes plants

(20 000 T) (120 000 T)

60 Millions €

Horticulture (flowers - nursery)

45 Millions €

A little bit less !

+ +

1961 : creation of SICA of Saint-Pol-de-Léon and first auction market 1962 : Agriculture Orientation Law 1963 : The first PO are recognised

1965 : Creation of CERAFEL 1966 : Decision of extension of rules : all the sales between growers and merchants must be done by the auction markets 1967 : application of the decision

HISTORICAL

2 000 FARMS

2 500 PRODUCERS

A SALES SYSTEM BY 3 SYNCHRONIZED AUCTION MARKETS

The packing stations

FROM HARVESTING TO TRANSPORT

J

J+1

Fresh vegetable

export 220 000 T

Germany United Kingdom

Benelux East Europe

South Europe

EXPORT

Areas knowledge Supply forecasts Quantities monitoring :

supplied, exported, processed, withdrawals,

Minimum price Mutualisation found Processing contracts Certification support, Withdrawal control

MARKET REGULATION

QUALITY MANAGEMENT STANDARD management

and standards

Documents and specifications : support of the quality system

Information (legislation, GAPs,

technic and agronomy…)

Traceability Specifications, procedures,

risk analysis…

Monitoring on legislation, standards, practices … and transfert to farmers

Monitoring plan of plant protection product residues on vegetables

More than 600 samples, which translates to more than 40,000 basic analyses, are conducted annually

Answer to clients demands : traceability, residue analysis, certifications…

Relation with suppliers to ensure quality of plants, manure, technical advice

Audit of QMS

A brand name

Contact with customers

Participation to international meetings and exhibition

Communication

Point-of-sales animations

Monitoring

Strategy competition watch

PROMOTIONAL ACTIONS

Improvement of production conditions

Incentive to use environnement-friendly process

Product traceability Promotion crisis prevention and

management measures.

MANAGING OF THE OPERATIONNAL PROGRAM (CMO FRUIT AND VEGETABLES)

Producers organisations (Pos) are the basic actors in fruit and vegetales regime. In the face of ever greater concentration of demand, grouping supply in this way strengthens producers’position in the market. The EU fruit and vegetable regime supports operational programs implemented by recognised POs. P0s can gather in associations of P0s (APOs) which have the same prerogatives than POs. POs or APOs can extend some rules in their area under certains conditions for one or several products.

THE CMO FRUIT AND VEGETABLES

CATE Greenhouse and open field) TERRE D’ESSAIS

(organic production)

Auray (biomatériaux)

Kerguéhennec (légumes industrie)

OBS (creation,

multiplication)

Bretagne

Plants (creation, research)

VEGENOV BBV (Biotechonology)

INRA

RESEARCH AND DEVELOPMENT

Organisations

linked to

CERAFEL

septembre 2016

CONTRACTUALIZATION AND FRUIT AND VEGETABLES

CARACTERISTICS OF THE FRUIT AND VEGETABLES MARKET (in France)

septembre 2016

• More than 50 items, with a diversity of areas, farms and marketing networks, …

• Working costs less or more importants : some crops are machineable, for other, working costs reach 80% of total

• No obstacle to access to the market, except for processed fruit and vegetables with whom it’s necessary having a proccessing unit in the sale channel,

• Varying perishability : some products can be stored, others not because of a very short life

• Variability of supply (weather dependance), demand and prices : inavoidable character of cyclical crisis.

MAIN PRODUCTION AREAS IN EUROPE

septembre 2016

1 - Andalousie

2 - Flandres

3 - Murcie

4 - Valence

5 - Pouilles

6 - Bretagne

THE VEGETABLES PRODUCTION in France (x1000 T)

septembre 2016

THE FRUIT PRODUCTION in France (X1000 T)

septembre 2016

EVOLUTION OF THE FRUIT AND VEGETABLES PRODUCTION (in millions T)

septembre 2016

SALE CHANNELS FOR FRUIT AND VEGETABLES (in France)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2009 2010 2013

Others

Grocers

Specialised

Markets

HD

Super

Hyper

% buyed quantities

BONDUELLE

DAUCY

AUTRES

FOURNISSEURS

FOR PROCESSED VEGETABLES: 100% UNDER CONTRACTS

septembre 2016

GROWERS PROCESSERS

SUPERMARKETS CHAINS

AUCHAN

CARREFOUR

CASINO

LECLERC

INTERMARCHE

Marche de Phalempin

Primacoop

France Endives

Valois Fruits

Fraileg

Cap endives

Primsanterre

Sipema

Soleil du Nord

Nord Alliance

Sipenord

AUCHAN

CARREFOUR

CASINO

LECLERC

INTERMARCHE

ENDIVE : MANY CONTRACTS BUT A LACK OF SUPPLY CONCENTRATION

septembre 2016

700 GROWERS

OTHER GROWERS

MERCHANTS PO SUPERMARKETS CHAINS

Others operators

ON A MARKET OF 14 000 TONS PER WEEK CONTRACTALS COMMITMENTS REPRESENT 50 %

septembre 2016

Ordered and

delivered

volumes

Not delivered

Free volumes « over-

the-counter »

5 000 T à

0.80 €

2 000 T

7 000T

CONTRACT

WITH

VOLUMES AND

PRICES

7 000 T à 0,80 €

This volumes are

stored by suppliers

First effect: prices go

down below 0,80 €

Second effect:

Supermarkets ask a price

reduction

SICA SAINT-POL

SOCOPRIM

TRISKALIA

BRETONNE

UCPT

TSM

AUCHAN

CARREFOUR

CASINO

LECLERC

INTERMARCHE

THE MARKET ORGANISATION IN BRITTANY

septembre 2016

2000 GROWERS 6 PO

SUPERMARKETS CHAINS

•

•

•

•

50 MERCHANTS

MARCHE AU

CADRAN

APO

CERAFEL

FRANCE

EXPORT

PROCESSED

WITHDRAWALS

- €

0.20 €

0.40 €

0.60 €

0.80 €

1.00 €

1.20 €

1.40 €

1.60 €

1.80 €

2.00 €

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

A CAULIFLOWER SEASON (unit : in heads)

PRICE PER HEAD

septembre 2016

REGULATION OF THE FRESH MARKET BY PROCESSING

PO producing cauliflowers

Processing units

• Annual contract with prices and

volumes

• Coordination of deliveries

in the area *

• A single package for all the

operators

• Costs mutualisation between all

the growers

*the transfer of property is effective in all the

PO but not between PO and the APO

The case of cauliflower

septembre 2016

REGULATION OF THE FRESH MARKET BY PROCESSING

CONTRACTUALIZATION : NECESSARY CONDITIONS

septembre 2016

• An organisation based on true producers organisations with transfer of property

• A possibility of arbitration in the PO or in an APO

• A mutual common fund to carry on all supply regulations an promotionnal operations

• A clarification of the competition rules

CONTRACTUALIZATION : LIMITS

septembre 2016

• Fragility of the interbranch framework

• The dominant position and the abuse of dominant position

• The definition of the relevant market

• The risk of illegal agreement in case of lack of transfer of property

• The risk to be considered as an obstacle to free trade

IN WHICH SITUATION ARE WE IN CONTRACTS ?

septembre 2016

• The contract have to be signed only at the first level of the supply chain,

• All the growers in cooperatives are considered like engaged by contract with their cooperative,

• On the traditionnal markets, there is an exemption,

• The buyer must propose a contract to the supplier but the supplier is not required to accept !

• However, some operators use contracts to gain market shares, but it isn’t always in the growers’ interest !

Thanks for

attention