Fruit industry must compete globally

Will Fruit Growers Benefit From Building Sell-off?

To the editor:

Re: Letter to editor: Will Fruit Growers Benefit From Building Sell-off? Jan. 23 Capital News.

In his letter to the Kelowna Capital News regarding the sale of packing house assets, Mr. Bryde misses the point and makes some poor analogies, and then ignores a few inconvenient truths. He is also short on suggestions.

First, the inference that amalgamation has not made any difference to the industry is faulty logic. If Mr. Bryde is saying that the packing differential (i.e.: cost-per-ton to pack the fruit) and sales costs are higher than before amalgamation, then it would be nice to see some numbers.

The fact remains that this industry has suffered from low returns from the marketplace for many years, and you cannot become viable unless you increase the revenue stream. Cutting costs at the packinghouse and farm levels brings only so much relief, and very soon hits a cost floor.

I’m assuming that Mr. Bryde feels that calling decision-makers by fancy names (e.g.: “CEO”) increases the cost. If this innuendo is true, how about some facts?

I’m surprised to hear that Sun-Rype Products is now a Jimmy Pattison company. It is true that Mr. Pattison owns about 1/3 of the outstanding publicly-traded shares in Sun-Rype. The last time I looked, Mr. Bryde could have bought shares too. He also could have kept his original shares (as I did) and then it could have been his company as well.

As a fruit processor, Sun-Rype obtains raw materials from the most efficient source possible—a blend of quality and price. I certainly agree that it is wasteful to dump fruit that could be processed into a retail product, but this fruit industry has such astronomical production costs compared to other world producers, we really can’t compete. Sun-Rype will obtain supplies from wherever it makes economic sense to do so.

Mr. Bryde’s fond reminiscences about the ‘former Sun-Rype’ smacks of slightly cloudy rear-vision glasses. Thirty years ago, the constant battle with Sun-Rype management (even though owned by the growers) was to get back a return of any kind on cull fruit. “Plus ça change…”

Unfortunately, the food-safe program is not one we as an industry have much control over. If we wish to ship fruit into markets that demand this program, we must have it. Period. And we need these markets, now more than ever, given the structural changes in North American wholesaling that concentrate market power into fewer and fewer hands. The same logic unfortunately holds true for the Sterile Insect Release Program.

The fact remains that this industry has downsized massively over the past decade. It would be great to be able to keep the Naramata and Summerland plants sitting around for 10 or more years as expensive eyesores in their respective communities waiting for the day when the Okanagan fruit industry will rise again. It isn’t going to happen, though.

We simply cannot supply world markets with $12-$14/hr labour growing fruit on property that costs $75,000/acre and more to purchase, in a country that refuses to support agriculture enough to be competitive with heavily-subsidized producers of the EU and the USA, even with a cheap-labour ‘subsidy’ from the Mexican government. And the boutique apple market can absorb only so much product.

The fact remains that in spite of much fanfare about “buying locally,” the average consumer doesn’t care where the apples come from as long as they are cheap and available when they want them. Just take a walk, as I did, through Canada Safeway’s produce section at the height of the B.C. peach season and check where the product comes from—definitely no relief there!

I do agree with Mr. Bryde about one thing: Okanagan Tree Fruit Company (OTFC) directors do need to come up with a business plan to become viciously competitive in an unforgiving market. Getting rid of expensive assets to finance needed improvements is a good place to start. Unfortunately, the hand-wringing procrastination exhibited by the board over the Naramata sale has cost it at least one highly-qualified and visionary potential developer that would have created an asset that Naramata’s citizens could have been proud of.

As in other political organizations such as the provincial government, we get the government we deserve. If Mr. Bryde feels that he has no input into the decisions of either the province or the OTFC, then he should start talking directly to both his MLA and the co-op directors.

Doug Mathias,