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Kroger rescinds new payment policy for produce suppliers

In a letter responding to an inquiry from the director of the USDA’s PACA Division, The Kroger Co. has clearly stated that produce suppliers are not required to participate in its new “Net 90” payment policy.krolog

A representative of the retailer sent a copy of the letter to The Produce News on July 9, stating that the letter had been sent to PACA Director Judith Wey Rudman on that very day. The Kroger letter states that it is in response to Rudman’s letter of June 25 apparently questioning the new policy.

In its entirety, the letter reads as follows:

“Dear Ms. Rudman,

“Thank you for your letter dated June 25, 2018.

“Kroger has always had great relationships with our suppliers. We view them as essential partners for shared success.

“Our produce suppliers received a letter outlining our recently-modernized payment terms and supply chain finance opportunity. We’ve shared with individual produce suppliers that we will respect existing contractual and legal mandates including PACA. We never intended for PACA-eligible produce suppliers to waive their PACA Trust rights.

“At the same time, we’ve welcomed and listened to feedback from our produce suppliers and other important stakeholder5s – including yours.

“I’d like to take this opportunity to clearly state that produce suppliers protected under PACA are not required to participate in Net 90 payment terms. For those PACA-eligible produce suppliers who are interested, we will continue to negotiate for payment terms that are permitted withion their PACA Trust rights.

“I can be reached at (number redacted by request) and would be happy to answer any further questions you may have about our payment terms of supply chain financing.

“Thank you,”

The letter was written by Matt P. Hodges, senior manager, sourcing and financing for Kroger.