Author: DRC

Welcome New Members

In February, DRC welcomed the following new members:

• AGRICOLA LA VENTA S.A. (Lima, Peru)
• AGROFINE IMPORT, EXPORT AND COMECIALIZATION INC. (British Columbia, Canada)
• ALWAYS GREEN CORPORATION (California, USA)
• ANGAR TRADING COMPANY INC. (British Columbia, Canada)
• AVO INTEGRA SAPI DE CV (Ario de Rosales, Mexico)
• CALCULUS CONSULTING AND INTERNATIONAL TRADE INC. (Ontario, Canada)
• COMERCIALIZADORA DE FRUTAS DE TACAMBARO, S.A. DE C.V. (Tacambaro, Mexico)
• CPS FRUITS & VEGETABLES INC. (Quebec, Canada)
• FRESH PLUS PRODUCE LTD. (British Columbia, Canada)
• FRESH PREP FOODS INC. (British Columbia, Canada)
• FRUTERA EUROAMERICA II SPA (Santiago, Chile)
• GENIO ENTERPRISES (A d/b/a of Li He) (British Columbia, Canada)
• GREWAL & SONS ENTERPRISES INC. (British Columbia, Canada)
• K & C SPECIALTIES INC. (California, USA)
• LT FARM, INC. (California, USA)
• SAN DIEGO FARMS LLC (Also d/b/a Fresh Origins)
• SERVICIOS COMERCIALES AGROFINE EXPORT SPA (California, USA)
• STANLEY MARKET LTD. (British Columbia, Canada)
• WR INTERNATIONAL INC. (California, USA)

DRC Membership: change in status

Automatic Terminations

On February 28, 2020, R & G DRAPER FARMS KESWICK LTD.  was expelled from DRC for for failing to comply with an arbitration award in the amount of $86,719.88 USD, which is a violation of the DRC By-Laws and the Dispute Resolution Rules. Responsibly connected parties: Ross Draper (President) and Gerald Frederick Draper (Secretary).

As of February 29, the following organizations no longer hold a DRC membership:

• 1st R.O.W. ESTATE WINERY LTD. (British Columbia, Canada)
• AGHA IMPEX INC. (Quebec, Canada)
• AUVIL FRUIT COMPANY, INC. (Washington, USA)
• BARAN IMPORT EXPORT (A d/b/a of Tekin Baran) (Ontario, Canada)
• CORNERSTONE CONSULTING AND AFRICAN PRODUCTS INC. (Alberta, Canada)
• DES MOINES TRUCK BROKERS, INC. (Also, d/b/a DMTB) (Iowa, USA)
• DIRECT PRODUCE MARKETING LTD. (Alberta, Canada)
• FRESH ORIGINS, LLC (California, USA)
• LATINOTRADING LLC (Florida, USA)
• LESTER CRAIG INC. (Prince Edward Island, Canada)
• LOYAL ENTERPRISES LTD (Saskatchewan, Canada)
• MARS FREIGHT LTD. (Ontario, Canada)
• MEET THE GREEN PRODUCE, LTD. (Ontario, Canada)
• MEREX INCORPORATED (Nova Scotia, Canada)
• R & R GLOBAL HOLDINGS LTD. (British Columbia, Canada)
• R & R PRODUCE INC. (Alberta, Canada)
• SALISH SHORE IMPORT INCORPORATED (British Columbia, Canada)
• TURK ENTERPRISES LTD. (Manitoba, Canada)
• WILSON PRODUCE LLC (Arizona, Canada)

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 14 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC can impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

To date, DRC has resolved claims in excess of $83 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

To learn more, reach out to our Help Desk at [email protected] or (+1) 613-234-0982 or visit us at www.fvdrc.com.

A friendly reminder that annual membership fees are due. Per the By-laws of the Corporation, failure to pay membership fee may result in termination of your membership, and leave you unprotected in future sales. If you have any questions regarding your outstanding annual membership fees, please contact us asap at DRC Help Desk | +1-613-234-0982 | [email protected]

As part of our continuing series to review Trading Standards, Section 20 contains those terms that are commonly used in North America.  A few articles in our Solutions Newsletter and Blog have been written focusing on situations where these trade terms are used. We will address most of these terms, which have to do with sometimes inconsistent INCOTERMS (see article North American Terms vs INCOTERMS).

For example, in North America, the most used terms are FOB and Delivered. However, in DRC’s trade terms which are very similar to PACA’s trade terms, the term FOB includes additional terms such as “FOB Acceptance”, “FOB Acceptance Final”, “FOB Inspection and Acceptance Arrival”, “FOB sale at a delivered price” and “FOB Steamer.” These terms are somewhat unusual and because they severely restrict rights and responsibilities they need to be discussed, understood and agreed upon to apply to a transaction. These terms are fully defined in this section of the Trading Standards and you should become familiar with them.

Another term included in this section is “Price After Sale (P.A.S.)” or “Open Price.” There is still some confusion between buyers and sellers using P.A.S. or Open Price which is not the same as consignment (P.A.S.  & Consignment Article). We have seen cases where these terms are interchanged and results in a different outcome from what was understood or expected.

Finally, “Purchase After Inspection,” “Shipping Point Inspection” and “Shipping Point Inspection Final” are also severely restrictive terms. These terms impact the rights of a buyer and the responsibilities of the seller and are very different from more commonly used terms. These terms require an inspection to be made either at shipping point or another location and limit the right of a buyer/receiver to make a claim after an inspection has been performed. In other words, the risk is passed to the buyer after an inspection is performed and limits the right to reject and or make claims at destination.

Welcome New Members

In January, DRC welcomed the following new members:

• Carthagro INC. (Québec, Canada)
• Similien Produits Frais INC. (Québec, Canada)
• Recyglobe Canada (Québec, Canada)
• Panchvati Supermarket (Ontario, Canada)
• Cogent Transport (Alberta, Canada)
• 2727221 Ontario INC. (Ontario, Canada)
• Hong King Food Market LTD. (Alberta, Canada)
• Easybuy Trading LTD. (Ontario, Canada)
• Fiston Ikwa Ndol Mbutiwi (Québec, Canada)
• A-Mart Trading CORP. (Alberta, Canada)
• Bacata Food Group INC. (British Columbia, Canada)
• 2596604 Ontario INC. (Ontario, Canada)
• Bles Farms (Alberta, Canada)
• Arsaces General Trading INC. (Ontario, Canada)
• Peri & Sons Farm, INC. (Nevada, USA)
• Shipley Sales, LLC. (Arizona, USA)
• Top Shelf Speciality (California, USA)
• Les Produits et Saveurs Méditerranéennes (Québec, Canada)

DRC Membership: change in status

As of January 31, the following organizations no longer hold a DRC membership:

• Abbotsford Growers LTD. (British Columbia, Canada)
• All Season Farms LTD. (Ontario, Canada)
• Blue Glacier Seafood Group INC. (British Columbia, Canada)
• Centreport Canada INC. (Manitoba, Canada)
• Chong Lee Market (British Columbia, Canada)
• Colonial Garden Centre LTD. (Ontario, Canada)
• Entreprise Promocurl INC. (Québec, Canada)
• Exportadora Sergio Ruiz Tagle Humeres Limitada (Metropolitana, Chile)
• Exportadora Y Servicios Rucaray S.A. (Providencia, Chile)
• Green Island Produce, INC. (California, USA)
• Groupe Frutex INC. (Québec, Canada)
• Jardin Vert / Green Garden (Québec, Canada)
• Matmata Prince Commerce INC. (Québec, Canada)
• N&S Traders INC. (Ontario, Canada)
• Nizam Produce INC. (Ontario, Canada)
• Rokan Distribution LTD. (Ontario, Canada)
• Sambafruits / Belavistabrasil (Sao Paulo, Brazil)
• Savco U.S.A. CORP. (New Jersey, USA)
• Seafood Express (P.E.I.) Limited (Prince Edward Island, Canada)
• Sham Import Export (Québec, Canada)
• Sociedad De Produccion Rural De Ri Villacarriedo Spr De Ri (Chiapas, Mexico)
• Sybaris Market, S.L. (Valencia, Spain)
• Tropical Superfruits Trading INC. (Ontario, Canada)

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 14 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC has the ability to impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

To date, DRC has resolved claims in excess of $83 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

To learn more, reach out to our Help Desk at [email protected] or (+1) 613-234-0982 or visit us at www.fvdrc.com.

Q. We are a wholesale receiver in Canada and recently bought a load of cucumbers originating from Mexico. We requested a CFIA inspection upon arrival as there are obvious problems in spite of good transit times and temperatures. The results of the inspection showed 25% total condition defects but no decay. We needed the product and there were no other cucumbers on the market. We shared the inspection results with the shipper who declined to make any adjustment or accept a consignment handling. While we know we could have rejected the product we elected to keep the product and claim damages so we could cover orders from as many customers as possible. After the product was sold, we provided an account of sales showing a net return of 66% of the total value of the shipper’s invoice. The shipper is not happy with the return. We would like to build a relationship with the shipper, but there is not much more we can absorb from the loss. What do you suggest we do?

A. Jaime Bustamante. First, we suggest you review your account of sales. Since you decided to keep the product and claim damages, your account of sales must show the date, amount, and price of the product sold. Your charges or expenses must be those resulting from receiving product that fails contract terms or DRC Good Arrival Guidelines. These includes freight, inspection cost, brokerage and any other direct out of pocket expense. Since the shipper offered you no help there are likely no other expenses you can claim. Without agreement you are essentially only entitled to break even. Frankly that is why most loads like this are rejected.

You have mentioned that you would like to keep working with them. There is no disagreement over the product received failing to meet DRC Good Arrival Guidelines or contract terms.   It is also true they were unwilling to discuss working the problem (which appears to be their fault) out with you.  If you are going to make a good faith offer, we highly recommend a frank discussion of how future claims will be handled .

Welcome New Members

In November and December, DRC welcomed the following new members:

• National Produce Trading Company (Pennsylvania, United States)
• Big H Foods Inc. (British Columbia, Canada)
• Avo Azteca SA DE CA (Michoacan, Mexico)
• Supreme Berry Farms, LLC (California, United States)
• XFresh Produce LTD (Ontario, Canada)
• Mucho Gusto Mexico (Ontario, Canada)
• Ocean Harvest Seaafoods Inc. (British Columbia, Canada)
• Jear Logistics, LLC (South Carolina, United States)
• AV Produce LTD (Alberta, Canada)
• Daily Veggies (Ontario, Canada)
• Mobcher Canada (Quebec, Canada)
• Frruiticola Villamangos SPR de RL (Chiapas, Mexico)
• Spadina Holding Group (Ontario, Canada)
• 9407-6007 Quebec Inc. (Quebec, Canada)
• Okanagan Speciality Fruits Inc (British Columbia, Canada)
• Fruit Orchard Holdings, Inc (Maryland, United States)
• Nshira Continental Supplies (Alberta, Canada)
• Green Garden (Quebec, Canada)
• DN Fresh (Ontario, Canada)
• Flanagan Food Service Inc. (Ontario, Canada)
• Intifruits Del Peru SAC (Plura, Peru)
• Latcanam LTD. (Alberta, Canada)
• 10621692 Canada INC. (Quebec, Canada)
• Diamond Fruits LTD. (Ontario, Canada)
• SJC Produce, INC. (California, United States)
• Mexavo Produce (Quebec, Canada)
• TWL Trading (British Columbia, Canada)
• Anay Peruvian Fruits S.A.C. (Lima, Peru)

DRC Membership: change in status

As of December 31, the following organizations no longer hold a DRC membership:

• Chang Sheng Supermarket LTD. (British Columbia, Canada)
• Sam Enterprises LTD. (British Columbia, Canada)
• Argicola La Venta (Lima, Peru)
• Sitio De Comercio de Frutas (Permambuco, Brazil)
• 2414692 Ontario INC. (Ontario, Canada)
• Sociedad Exportadora Verfrut (Las Cabras, Chile)
• FMK Food Limited (British Colombia, Canada)
• Imex Andalucia INC. (Quebec, Canada)
• La Catrina Produce Inc. (Ontario, Canada)
• 9347-9426 Quebec IINC. (Quebec, Canada)
• GM Impex (Quebec, Canada)
• Sigit & Associes INC. (Quebec, Canada)
• CSS Farms LLC (Washington, United States)
• C & J Trading LTD. (British Columbia, Canada)
• Orangeline Farms Sales Limited (Ontario, Canada)
• The Fine Food Stop (Alberta, Canada)
• Med-Alg Import & Export (Ontario, Canada)
• Kern Ridge Growers LLC. (California, United States)
• Angel Seafoods LTD. (British Columbia, Canada)
• Heartland Resources INC. (British Columbia, Canada)
• Great Giant Foods Canada INC. (British Columbia, Canada)
• Yashica International INC. (Ontario, Canada)
• Agroinca PPX (Arequipa, Peru)
• 9265-7816 Quebec INC. (Quebec, Canada)

For details regarding a change in status, please contact the office.

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

About DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 14 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC has ability to impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

To date, DRC has resolved claims in excess of $83 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

To learn more, reach out to our Help Desk at [email protected] or (+1) 613-234-0982 or visit us at www.fvdrc.com.

DRC will be participating in this year’s Fruit Logistica Trade Show in Berlin, Germany. On February 5-7, 2020, DRC team members will be on hand at our booth in the Canada Pavilion to meet with members and potential members. If you have a trade partner who is not currently a member, please encourage them to stop by the booth to discuss the benefits of membership.

Visit us to learn more about our full range of member benefits and services. As a private commercial dispute resolution body, DRC provides the produce trade with harmonized trading standards, education, mediation and arbitration procedures and services necessary to avoid and resolve commercial disputes in a timely and cost-effective manner.

Exporting to Canada? Canada’s Safe Food for Canadians Regulations include key trade and commerce requirement for buyers and sellers of fresh fruits and vegetables. A DRC Membership is a CFIA regulatory requirement for Canadians to buy, sell, import or export fresh fruits or vegetables, unless exempt. Make sure you are selling only to DRC members in Canada and feel free to share our information with your industry peers.

To learn about the DRC’s full suite of services and come and see us at the Canada Pavilion in Hall 23, A-15 or www.fvdrc.com

Yes, it has been 20 years since the DRC opened its doors for business. Throughout the coming year we will be celebrating this milestone by remembering the people who made it happen, the vision, the triumphs, and the people who keep it going. We will also examine those places where the vision continues to chase the goal.

It is a unique story starring a dedicated group of industry and government people who took an idea, seized an opportunity, and launched what has become the DRC today. There were many meetings and consultations across North America in the late 1990’s resulting in far too many stories to recount, but we will do our best to review where the DRC came from.

We will also be reporting on where the DRC is going as we move into our third decade as the dispute resolution body in Canada and beyond as our membership expands around the world.

It has been my privilege to be at the helm of the DRC since 2011, but the foundation and story of this unique and thriving organization is built on the shoulders of others who dedicated time and energy to a vision and strategy that has endured to, as our tag line says ……………… keeping trade on track.

Fred

We are almost at the end of our review of all sections of DRC’s Trading Standards. In this issue, we address the last three terms in section 19 which includes “Reject without reasonable cause”, “Suitable shipping condition” and “Truly and correctly account”. We will end the series with a summary of section 20 – Trade Terms and section 21 – Interpretation.

Reject without reasonable cause

The word rejection in our industry is sometimes used loosely. We sometimes hear of receivers referring to rejecting the product but while still in possession of the load. When this occurs they have unknowingly committed an act of acceptance (see our November Solutions Blog which included the concept of acts of acceptance). In order to make a rejection in a proper and timely manner, a receiver must make sure that: a) there is legal justification to refuse produce within reasonable time, b) not refuse produce that complies with the contract and c) has not committed an act of acceptance. As a receiver, if you have received produce in deteriorated condition or that has failed to meet contract terms, but you have committed an act of acceptance, you can offer the product back to the shipper or seller. However, if the shipper or seller does not accept the load back, your only recourse left is to claim damages or secure an agreement in writing to change the terms of the contract.

Suitable Shipping Condition

This term only applies to FOB transactions where the seller assures that, under normal transit conditions, the product will meet the agreed quality and condition requirements when the product is shipped. This implies that some degree of deterioration will normally occur even under the best transit conditions due to the perishable nature of the commodities in our industry. This term is also known as Good Delivery or Good Arrival where percentage of tolerances of defects are increased in comparison with the tolerances established by the grade standard where applicable.

Truly and correctly account

Consignment and Joint Account Transactions require that an itemized account of sale is submitted per transaction. An itemized account of sales must include the date of receipt and date of final sale, the quantities sold at each price, or other disposition of the produce, and the proper, usual or specifically agreed upon selling charges, expenses properly incurred and any other expense agreed upon. While these are the only terms that require an itemized accounting, when a receiver decides to claim damages and uses an account of sales to prove their damages, they must be prepared to meet the requirements of an itemized account of sales. Additionally, sales and expenses must be supported by their respective sales tickets, receipts, or invoices if required. In addition, regrading or repacking require its own accounting method which allows a deduction from the invoice price based on the labour and shrink (the amount of discarded product) costs, the portion of the freight of the lost product, the cost of the inspection (if applicable) and other costs as a result of having the product repacked or regraded.

On January 15, 2020, most businesses in the fresh fruits or vegetables (FFV) sector will become subject to new requirements under the Safe Food for Canadians Regulations (SFCR). These include: preventive controls, preventive control plans and traceability.

In addition, importers who require an SFC licence and who do not have a valid licence as of that date may experience delays or rejection of their shipment at the border and may be subject to other SFCR enforcement actions.

New requirements for lot code labelling of consumer-prepackaged fresh fruits or vegetables will also come into force at that time. However, businesses will have until January 15, 2021 to use up existing packaging.

Prepare now

FFV businesses should begin now to learn about and prepare for the new requirements. New and updated guidance documents are available on the CFIA website:

• Fact sheet: Fresh fruits and vegetables businesses
• SFCR timelines – Fresh fruit or vegetables
• Definition of lot code – Safe Food for Canadians Regulations: Glossary of key terms

Businesses should also review the following for information on lot-code labelling:

• Traceability-specific labelling requirements for fresh fruit or vegetables

Inspection frequency

The number of times that CFIA inspects a food business depends on several factors, with risk to food safety being one of them. Using their My CFIA account, SFC-licensed businesses can provide operational and risk information that may help lower their establishment’s risk result and lower the frequency or scope of inspections.

Licence holders that do not complete this information could be inspected at the same rate as an establishment that has been assigned the highest risk result for that commodity.

Watch the FFV recorded presentation

Businesses can watch a recorded presentation to learn more about the new SFCR requirements. The presentation discusses the implications and benefits of the SFCR for the FFV sector, and is tailored to the interests of growers, harvesters, importers and exporters.

For more information about the SFCR, visit inspection.gc.ca/SafeFood.