Author: DRC

In October, DRC attended Fruit Attraction in Madrid, Spain and The Grocery Innovations Trade Show and Conference at the Toronto Congress Centre. This was the second consecutive year that DRC attended Fruit Attraction and the 2019 3-day event drew in excess of 89,000 visitors from 127 countries. DRC was able to meet with several Spanish and South American companies who export to Canada and the United States as well as connect with some current European members. We were impressed by the number of Canadian DRC members we met during the show and had only good things to say about it.

The Grocery Innovations Trade Show and Conference is a two-day event that focuses on independent grocers and all aspects of their business operations. In addition to a focus on local product there was an international flair to the show, as it included Spanish, Korean and Sri Lankan pavilions.  As the DRC walked the trade show floor, it was apparent that many independent grocers are not familiar with all the changes related to the Safe Food for Canadian Regulations, and how they impact their business.  DRC will look to upcoming opportunities to ensure that independent grocers understand their SFCR-related obligations, particularly the regulatory requirement for a DRC membership.

Welcome New Members

In November, DRC welcomed the following new members:

• 9407-6007 QUEBEC INC.
• AV PRODUCE LTD.
• AVO AZTECA SA DE CV
• BIG H FOODS INC. (Also d/b/a Big H)
• DAILY VEGGIES (A d/b/a of 9900390 Canada inc.)
• FRUTICOLA VILLAMANGOS, SPR de RL (Chris&Co)
• JEAR LOGISTICS, LLC
• MOBCHER CANADA INC.
• MUCHO GUSTO MEXICO (A d/b/a of Distribuidor de Colores y Sabores Naturales M, INC.)
• NATIONAL PRODUCE TRADING COMPANY LLC
• OCEAN HARVEST SEAFOODS INC.
• SPADINA HOLDING GROUP
• SUPREME BERRY FARMS, LLC
• XFRESH PRODUCE LTD.

DRC Membership: change in status

As of November 30, the following organizations no longer hold a DRC membership:

• 3J PRODUCE LTD.
• 9265-7816 QUEBEC INC.
• AGROINCA PPX (También haciendo negocios como Agroinca Produc
• ANGEL SEAFOODS LTD.
• GREAT GIANT FOODS CANADA INC.
• HEARTLAND RESOURCES INC.
• KERN RIDGE GROWERS LLC
• KNOTEK BROS INC. (Also, d/b/a Geo Produce)
• MED-ALG IMPORT & EXPORT (A d/b/a of Mohamed Tahar Mallem)
• NEW LIFE LAND INC.
• YASHICA INTERNATIONAL INC.

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 info@fvdrc.com or (+1) 613-234-0982 or visit us at www.fvdrc.com.

For those who export and import commodities to and from a number of countries or even interstate or interprovincial boundaries, INCOTERMS (International Commercial Terms) are used on a daily basis and, at a minimum, it is important to have a basic knowledge of the terms and their implication. Every ten years the INCOTERMS listing is revamped and published to reflect consideration of the latest adjustments and practices from the trade. “Incoterms®” is a trademark of the International Chamber of Commerce and includes the transportation rights and responsibilities of the parties involved in a transaction.

In our Solutions Blog we have published previous articles about the INCOTERMS or that reference them: “DRC Good Arrival Guidelines and INCOTERMS” and “North American Terms vs. INCOTERMS”.

INCOTERMS help to determine how costs and risks are allocated to buyers and sellers. In our industry, they are normally included in a Bill of Lading.

It is important to know that on January 1, 2020, the new INCOTERMS 2020 will come into effect and will contain the International Chamber of Commerce (ICC) rules for use of the 11 Incoterms® trade terms.

The new INCOTERMS 2020 edition is available online and can be purchased on the following website:

https://2go.iccwbo.org/incoterms-2020-eng-config+book_version-Book/

In the mean time, INCOTERMS 2010 remain in effect and are available on the ICC website.

If you have any questions regarding how the INCOTERMS impact your transactions, contact DRC’s Help Desk at 613-234-0982.

We are approaching our analysis of the final sections of DRC Trading Standards. Section 19 includes 25 definitions, some of which have already been addressed in previous sections of DRC Trading Standards. Therefore, we will concentrate on those that have not been previously mentioned and have a bigger impact on your day to day operations.  This article will focus on the definitions of “acts of acceptance” and “account promptly”. Two follow-up articles pertaining to Section 19 will be included in the December and January Solutions Blog and will cover: “full payment promptly”, “reasonable time”, “reject without reasonable cause”, “suitable shipping condition” and “truly and correctly account”.

“Acceptance”

There are certain actions that a buyer/receiver could perform that automatically indicate that they have accepted a load and will prevent them from properly rejecting a load. These include:

• Diverting a load without prior agreement with the seller/shipper. The shipper/seller should know the destination of the product and/or any other delivery stops the carrier is making prior to delivering the load to its destination. This includes, cross docking a load.
• Unloading product from the truck except for the purpose of getting an inspection performed on the load.
• Failure to provide timely and proper notice of a rejection, provided that an act of acceptance has not taken place and properly documenting the breach of contract or damages associated with the quality or condition of the product.
• In the case of a consignment transaction, any act by the consignee which is inconsistent with the consignor’s ownership it is considered an act of acceptance only if ratified by the consignor.

“Account Promptly”

Unless specifically agreed to by the parties, submitting a true and prompt account of sales or liquidation report means:

• In connection with a consignment or joint account transactions, within 10 days after the date of final sale with respect to each shipment, or within 20 days from the date the goods are accepted at destination, whichever comes first
• Provided, that whenever a grower’s agent or shipper distributes individual lots of produce for or on behalf of others, accounting to the principal shall be made within 30 days after receipt of the shipment from the principal for sale or within 5 days after the date the agent receives payment for the goods, whichever comes first.
• Whenever a grower’s agent or shipper harvests, packs, or distributes entire crops or multiple lots therefrom, for or on behalf of others, an accounting of the initial shipment shall be rendered within 30 days after receipt of the goods for sale.
• Accountings for subsequent shipments shall be made at 10-day intervals from the date of the accounting for the initial shipment and a final accounting for the season shall be made to each principal within 30 days from the date the agent receives the last shipment for the season from that principal. Provided further, that whenever the marketing agreement between a principal and an agent includes a provision for storage of goods prior to sale, the agent shall render accountings of inventory and expenses incurred to date at 30-day intervals from the date the goods are received by the agent until sales from storage begin.

DRC’s Luc Mougeot attended the 21^st Session of the Codex Committee on Fresh Fruits and Vegetables (CCFFV) in Monterrey, Mexico as a member of the Canadian delegation. The CCFFV approved final versions of the grade standards for garlic, ware potatoes and kiwifruit. The Committee also worked on draft standards for yam, onion and shallots, berry fruit and fresh dates.

Similar to how US Grade Standards and Canadian Standards are used in transactions in North America to determine the quality of the commodity and to resolve disputes, the Codex Alimentarius is a collection of internationally adopted food standards and related texts presented in a uniform manner. These food standards and related texts aim at protecting consumers’ health, ensuring fair practices in the food trade, and resolve disputes. For additional information or to receive Codex updates, please contact Luc at 613-234-0982 or lmougeot@fvdrc.com

The Codex grade standards for fresh fruit and vegetables may be viewed here.

Welcome New Members

In September and October, DRC welcomed the following new members:

• Dom Amodeo Produce LTD. (Ontario, Canada)
• Sandher Fruit Packers LTD. (Also d/b/a Sandher Fruit Packers) (British Columbia, Canada)
• First Choice Foods INC. (British Columba, Canada)
• Visafruits S.A. (Spain)
• Koteles Farms Limited (Ontario, Canada)
• Ravine Jaunce Trading LTD. (British Columbia, Canada)
• Blue Orbits (A d/b/a of Blue Orbits Inc.) (Ontario, Canada)
• Pacific Breeze Winery LTD. (British Columbia, Canada)
• Mark Craig INC. (Prince Edward Island, Canada)
• Gordon Food Services Canada LTD. (Ontario, Canada)
• Andrade Sun Farms (Sau Paulo, Brazil)
• Tomato Town Produce Company LTD. (Ontario, Canada)
• Richardson Eugene (Quebec, Canada)
• I.B. (2013) Nuts and Dried Fruits Trading INC. (Quebec, Canada)
• Tut Distribution INC. (Quebec, Canada)
• Bandor8 INC. (Ontario, Canada)
• Fulger Transport INC. (Ontario, Canada)
• Plantaciones Del Sol SAC (Lambayeque, Peru)
• Shine Pig Technology LTD. (British Columbia, Canada)
• 2714462 Ontario LTD. (Ontario, Canada)
• Importation GLNA INC. (Quebec, Canada)
• Orange-Aide LTEE (Quebec, Canada)
• Sun Island Products INC. (Ontario, Canada)
• IMSA for Global Logistics INC. (Ontario, Canada)
• Aliments Amelya Impex INC. (Quebec, Canada)
• Les Jardines des Fees S.E.N.C. (Quebec, Canada)
• Vivid Produce INC. (Alberta, Canada)
• Distribution MFG INC. (Quebec, Canada)
• Vegisol INC. (Quebec, Canada)
• Safia Fruits (Quebec, Canada)
• 11583883 Canada LTD. (Ontario, Canada)
• Ramirez Imports LTD. (British Columbia, Canada)
• HE Empire INC. (British Columbia, Canada)
• Cyrine Mondial S.E.N.C. (Quebec, Canada)
• AM Fresh North America INC. (Ontario, Canada)
• Kwong Fung Food Processing Factory LTD. (British Columbia, Canada)
• Healthy Choice Wholesale Foods INC. (British Columbia, Canada)
• National Produce Trading Company LLC. (Pennsylvania, USA)
• Big H Foods INC. (British Columbia, Canada)
• Avo Azteca SA DE CV (Michoacan, Mexico)

Automatic Terminations

On September 23, 2019, Les Aliments ALS Inc. / ALS Foods Inc. was expelled from DRC for failure to meet their financial obligations and failure to provide requested information in violation of section 1.5 of the DRC Trading Standards and section 3.03 of the DRC By-laws. At the time of expulsion, Annie Bertrand was the only responsibly connected party to this organization.

DRC Membership: change in status

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

• Cavendish Produce (A Division of Cavendish Farm Corporation) (Prince Edward Island)
• Highwide International (Ontario, Canada)
• KK Bee Ltd. (Ontario, Canada)
• Fruits Ideal (Quebec, Canada)
• Sun World (California, USA)
• Sysco Quebec (Quebec, Canada)
• Philip Warkentin (Ontario, Canada)
• Fresh Pack Farms (Ontario, Canada)
• Cornies Farms Limited (Ontario, Canada)
• Knotek Bros INC. (Ontario, Canada)
• New Land Life INC. (Ontario, Canada)
• 3J Produce LTD. (Ontario, Canada)
• Lake Erie Farms INC. (Ontario, Canada)
• Groupe Ethier 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 info@fvdrc.com or (+1) 613-234-0982 or visit us at www.fvdrc.com.

Q. We are a USA distributor who exports to Canada and we are DRC members. For the past three years we have worked with a few Canadian customers without any real problems that we were not able to resolve among ourselves. Recently, we were unable to resolve a dispute with one of them and we advised them that we were taking the dispute to DRC. Their response was that their company has not been a member of the DRC for more than 6 months. Additionally, they didn’t want the DRC to get involved. We are disappointed and frustrated with their response. Do we still have recourse through DRC and what would you recommend we do to keep ourselves updated regarding changes in a membership status?

A. To answer your first question, if your client resigned their membership or if it was terminated, as long as the transaction happened when they were still members, you still have recourse through DRC. All former DRC members who are terminated or expelled are still liable for any dispute over a transaction that occurred when they were still members. If the transaction occurred after their membership was terminated, we may not be able to get directly involved but, your client should be reported to DRC and the Canadian Food Inspection Agency for importing product without a valid DRC membership. This could lead to serious enforcement actions to your client by the CFIA.

To answer your second question, you should establish a procedure to verify the “Active Members” list located at www.fvdrc.com on a regular basis.  The DRC updates the “Active Members” list on a weekly basis. If you don’t find the company you are looking for on the “Active Members” list, that should raise a flag.  Make sure your sales staff and credit managers have access to the DRC website. You can also call us to verify who is and who is not a member and track the changes published in DRC Solutions Blog.

Continuing with our efforts to summarize DRC’s Trading Standards and make these standards more understandable for our members, in this issue, we address the following sections:

Section 15. Conversion of Funds

While the title of this section may be confusing, this section clarifies the requirements for prompt and accurate passing of funds directly from buyer to seller, or from buyer to broker/seller to shipper, or any other person having a financial interest. In other words, intermediaries (brokers, grower’s agents, consignees, etc.) cannot hold payment of funds that do not belong to them without reasonable cause.

Section 16. Grade and Condition Standards for Commodities

Regarding the grade and condition of product, the parties may agree to any specific standards prior to shipments if such standards comply with any applicable minimum grade and condition standards that have been established by the importing or exporting country.  In addition, the parties may establish their own average percentage of defects for all commodities if it is agreed upon. In the absence of an agreement on grade or average percentage of defects, no grade will be assumed, but the calculation of conformance to the contract will default to the DRC’s Good Arrival Guidelines.

Section 17. Inspection Policy

Members need to know that unless there is an agreement for an in-house quality report or to request a private survey, a government inspection is the only inspection considered prima facie evidence and therefore carries more weight than any other survey report.  Private surveys or in-house inspections need to comply with the standards and elements indicated in DRC’s Inspection Policy. For complete information about DRC’s Inspection Policy, visit our website.

Section 18. Membership Declaration

All members must declare their membership number when requested to do so by any Canadian, United States of America or Mexican government department or agency. It is specifically important for Canadian importers and Non-Resident importers to declare their DRC membership number to Canadian Border Services Agency (CBSA) to be able to let the product into Canada.

Although the Safe Food for Canadians Regulations (SFCR) came into force on January 15, 2019, certain requirements were being phased in over the following 12 to 30 months. Effective January 15, 2020, all SFCR requirements will apply to the fresh fruit and vegetable sector.

CFIA continues to provide information to the sector and will be posting two pre-recorded webinars to their website, one in French and one in English. The presentations will be available in late October 2019. In addition to this, in November the CFIA plans to hold four Q&A WebEx sessions (2 in French and 2 in English). Since the webinar presentation will be posted on CFIA’s website, these Q&A sessions will focus on responding to questions that may arise from the FFV sector community.

This will be a good opportunity to pose questions and request clarification on matters directly related to fresh fruit and vegetables. DRC will circulate additional information as it becomes available.

Welcome New Members

In August, DRC welcomed the following new members:

• H. Wood Farms (Prince Edward Island, Canada)
• Unearthed Produce (Prince Edward Island, Canada)
• Green Earth Organics (Ontario, Canada)
• DG Alimentation ((Québec, Canada)
• Aguacates JR S.A De C.V (Michoacan. Mexico)
• Citrus Plus (California, USA)
• Giumarra International Berry LLC (California, USA)
• Schmieding Produce (Arizona, USA)

Automatic Terminations

On August 19, 2019, Northern Specialty Potato was expelled from DRC for failing to communicate, which is a violation of section 3.03 of the DRC by-laws. At the time of expulsion, Jeremy Rood was the only responsibly connected party to this organization.

DRC Membership: change in status

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

• Bell City Transport Systems (2012) Inc. (Ontario, Canada)
• Open & Close Food Services (Alberta, 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 info@fvdrc.com or (+1) 613-234-0982 or visit us at www.fvdrc.com.