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Non-member access to member portal

Did you know that while most of the information posted on DRC Member Portal is reserved for members only, you don’t have to be a member to use some of the features the portal has to offer?

To start you’ll need to go to Member Login section and register a new account. Once logged in, as a non-member, you will have basic access to the portal where you will be able to:

  • Have limited access to the membership directory where you can search for companies by location and type of business
  • Verify if the company is either a DRC active or inactive member
  • Apply for a full membership
  • Send an inquiry for DRC Trading Assistance or any other help

We are encouraging everyone to visit our redesigned website and discover the refreshed Member Portal as a valuable resource for the produce industry.

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Do you need a Safe Food for Canadians licence or DRC membership to export produce from Canada?

Let’s start with the easy part, a DRC membership. According to the Safe Food for Canadians Regulations (SFCR), Canadian exporters are required to have a DRC membership unless excepted, mainly because you ship produce you have grown yourself or are shipping less than one metric ton a day. There are a couple of other exceptions, but there are probably not many small retailers or charities exporting produce from Canada. In other words, if you are selling from Canada make sure you and your foreign buyer are DRC members. It’s not just good business, it’s the law for Canadian fresh produce exporters.

Now the more complicated question, do you need a SFCR licence from CFIA to export produce from Canada? You need a licence to export food if you would like to receive an export certificate, or another export permission such as being on an export eligibility list, from the CFIA. 

You do not need a SFCR licence to export food:

  • if your sole activity is export and you do not need an export certificate, or another export permission, from the CFIA, or 
  • if your sole activity is an export custom broker or freight forwarder.

If export is not your sole food related activity, we strongly urge you to visit the CFIA website (inspection.gc.ca) and use some of their self-assessment tools to see if you need a licence.

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COVID 19 and Payment Terms

There is little question COVID-19 has stressed and complicated business models. Some people are really hurting and there is no way around it. If you are one of those folks, I encourage you to have a conversation with your suppliers now! We are seeing many relationships coming to amicable terms when timely conversation has taken place.
Understandably, the relationship is not so amicable when the cash flow conversation does not take place until the invoice is past due, the reminder is ignored and phone calls have not been answered. And horror of horrors ………… you said, “the check is in the mail” and it is not. In my 35 years working on problems, I have seen many relationships blossom following honest and forthright communication. I have seen zero relationships recover when someone says the check was sent and it was not.
When you are the supplier, let’s face it, you have a choice to make: whether to work with your customer or play tough while knowing that your customer may or may not survive without your help.
There are some definite boundaries you should respect when electing to accept payment beyond the original terms.
Both DRC and PACA require that complaints be filed within 9 months of when payment was due. In my experience that means the original due date. If your arrangement is going to be longer than that, you should include in the conversation that a DRC or PACA complaint will be filed. You will have control of when you choose to move forward for a decision, but the informal filing must be done within the prescribed time frame.
If you are utilizing the protections offered by the PACA Trust do not forget that you must put the customer on notice of the trust within 30 days of when payment was due and payment terms longer than 30 days are not recognized.
If you have decided to ride it out with your customer, get a firm commitment for them to pay something on a regular basis. That will signal they have some income and that if they miss a payment it will tell you their plan is not working.
Some things change and some don’t. What has not changed is that honesty and integrity apply equally in good times and bad. When your trading partner forgets that, it is time to take action and file a claim for yourself and for your industry.

Fred C. Webber

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ARBITRATION DECISION BRIEF:Whether the Inspection Certificates show that the fruit failed to meet contract terms.

Commencing this year, we will publish a summary series of arbitration decisions which will help members better understand how DRC Rules and Regulations apply in the event of a dispute. DRC Dispute Resolution Rules state that all DRC arbitrations are private and confidential. We have omitted the names of people, including arbitrators, as well as companies. DRC only acted as the administrator of the arbitration process, and did not participate during any hearings (if applicable), therefore this summary is based solely on the arbitrator’s written decision and may not reflect important information shared with the arbitrator through written briefs or verbal testimony.

Case: DRC File #19617 –Parties Domiciled- Spain and Canada

Facts:

  • The Claimant shipped to the Respondent 1,820 cartons of mandarins CAT#1 quality on February 26, 2016. The product origin was Spain and according to the invoice, it was sold F.O.B. at $22,200.01. The Respondent received the shipment in Canada on March 10, 2016, and a private inspection was performed. The private inspection showed defects ranging from 8-11%, with decay ranging 2-4%.
  • Upon receiving a copy of the private inspection on March 12, 2016, the Claimant requested that a CFIA inspection be performed. The CFIA inspection was performed on March 15, 2016 but, only on1,152 cartons. The results of the inspection indicate the mandarins were affected by 7% decay and 1% skin breakdown. The Respondent forwarded the inspection to the Claimant, arguing that the load was out of grade as it did not meet good arrival.
  • After the Respondent claimed damages, a $14,938.01payment was submitted to the Claimant. The Respondent supports the alleged damages with a detailed account of sales. 

Issue:

Whether the inspection certificates show that the fruit failed to meet contract terms.

Arbitrator’s Analysis/Reasoning:

There was no disagreement between the parties that the mandarins in question were sold as CAT#1. They disagreed, however, as to whether the inspection certificates show that the fruit failed to comply with this grade.

The Claimant’s invoice indicates that the mandarins were sold FOB. The risk of loss would have passed to the Respondent once the Claimant loaded the product (or container) onto the ship. The Claimant was required to meet the agreed-upon CAT#1 standard at shipping point on or about February 26, 2016 (the date the ship departed), which was two weeks before the product was inspected by a private company in Canada (and two and one-half weeks before the CFIA inspected the load).

With respect to the relevant grade standard, the question that arises is, do the inspections taken in Canada show that the product was out of grade when loaded at the Port of Spain? In view of the two-week voyage from Spain, the inspections taken in Canada are simply too remote (in time and place) to establish that the mandarins were out of grade on or about February 26, 2016, when the product, and the risk of loss, passed from the Claimant to the Respondent. The decay reported in Canada may very well have developed in transit and/or while awaiting inspection. 

DRC’s Good Arrival Guidelines provide that tangerines (i.e. mandarins), upon arrival at contract destination, may be affected by no more than 15% average condition defects, 8% very serious defects, and 5% decay.  If a timely inspection shows that any of these percentages are exceeded, the product in question may be deemed to be abnormally deteriorated in breach of the shipper’s warranty of suitable shipping condition which is applicable in FOB sales.

The private inspection does not show that the mandarins exceeded the relevant good arrival guidelines upon arrival in Montreal. (As an aside, it is worth noting that private inspection are not typically given the same weight as government inspections unless it is clear that both parties agreed to the use of a private inspection; therefore, it should not be assumed that the private inspection certificate would have been sufficient to establish a breach even if the percentage of defects reported were greater).

Irrespective of the cause of the delay in obtaining the inspection, establishing that the fruit was affected by 7% decay on March 15, 2016, does little to prove that this product was affected by more than 5% decay on March 10, 2016, when the product arrived. Furthermore, it is important to note that only 1,152 of the 1,820 cartons shipped were available for the CFIA inspection.  Given the timing of this inspection, and the fact that a significant portion of the product was not inspected, the CFIA inspection, does not establish that the mandarins in question failed to make good arrival in breach of the sales agreement.

Arbitrator’s Decision:

The Respondent failed to prove that the mandarins in question failed to comply with the sales agreement; therefore, Claimant is owed the balance of its invoice price, or $7,261.99, plus arbitration fees of $2,200.00, for a total amount due from the Respondent to the Claimant of $9,461.99 (U.S.).

DRC Comments:

There are several points in this decision that DRC members must take into consideration in their transactions:

  • When a Grade Standard is discussed between parties, make sure both parties understand what grade standard is referred to, and if the product must meet the grade standard at shipping point or at destination.
  • For DRC members, in the absence of an agreement on a grade standard, under DRC Good Arrival Guidelines, the transaction defaults to FOB no grade contract and Good Arrival applies.
  • In the absence of an agreement on a private inspection/survey, DRC members must request a CFIA inspection.
  • To prove the product arrived in deteriorated condition, the request for an inspection must be done in a timely manner. A buyer who requests a private inspection/survey first without a prior agreement in place, may find that it is too late to request a government inspection if the seller does not accept the private inspection/survey.
  • The results of a government inspection are representative of the full load when a minimum of 75% of the load is available for inspection and satisfactory reason exists for limited sales prior to inspection.

For more information regarding what sections of DRC Trading Standards applied to this dispute, you can review the following sections:

DRC Trading Standards:

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Membership Updates for March 15, 2021

Welcome New Members
From January 1 until February 15, 2021, DRC welcomed the following new members:
AM PRODUCE INC. ON Canada
CHADI IMPORT-EXPORT INC. (Faisant également affaire sous Cha QC Canada
CHAROEN POKPHAND FOODS CANADA INC. (Also d/b/a CPF Canada) ON Canada
COUFFIN BIO CDN INC. QC Canada
EXCEPTIONAL FUTURE LLC. (Also d/b/a Exceptional Future) CA United States
GIRAFFE FOODS INC. (Also d/b/a Giraffe Foods) ON Canada
IQBAL HALAL FOODS INC. ON Canada
IRIGOYEN FARMS, INC. CA United States
JARDINS ST-LÉON GARDENS INC. (Also d/b/a St-Léon Gardens) MB Canada
JOHNSON PRODUCE LTD. ON Canada
LE PALMIER D’OR / MARCHÉ ARDIS (Faisant également affaire so QC Canada
LEVEL HOLDINGS LTD. BC Canada
MAHDI ET SALAH IMPORT (Faisant également affaire sous 9433-6 QC Canada
MARINA EXPORT & IMPORT INC. ON Canada
MISSION NATURALS INC. BC Canada
PERUVIANO FOODS CANADA (A d/b/a of 2726390 Ontario Inc.) ON Canada
STRONACH & SONS (2020) INC. ON Canada
SUN FRESH CITRUS LLC. CA United States
WEN HO OF CANADA LTD. (Also d/b/a Wen Ho) ON Canada
YASHICA INTERNATIONAL INC. ON Canada

DRC Membership: change in status
As of February 15, 2021, the following organizations no longer hold a DRC membership:
ACCU FOODS LTD. AB Canada
AGRO YOSTOS (A d/b/a of 916403 Alberta Ltd.) AB Canada
AMALFI FINE FOODS INC. ON Canada
BERKANE IMPEX (Faisant également affaire sous Abdelhak (Abe) ON Canada
CANAMEX-CARBRA TRANSPORTATION SERVICES INC. ON Canada
CULTIVA FRUIT DISTRIBUTION LTD. BC Canada
DANDRICK’S PRODUCE (Faisant également affaire sous 9404-5093 QC Canada
DI VAIN ENTERPRISES (A d/b/a of Quetzal Silva Torres) BC Canada
EASYBUY TRADING LTD. ON Canada
EGYCAN IMPORT AND EXPORT INC (A d/b/a of 9381-8540 Quebec In QC Canada
FALCONCREST PRODUCE CO. LTD. ON Canada
FRESH QUEST MELONS LLC FL United States
FRUITIS LTD. Israel Israel
FRUTERA EUROAMERICA S.A. Region Metropolitana Chile
GOLDEN WEST VEG, INC. CA United States
IMPORTATION MATILDA INC. / MATILDA IMPORT INC. QC Canada
KORALTA AGRI-BUSINESS INC. (Also d/b/a Koralta Agri) AB Canada
LIRODE (Faisant également affaire sous 9062-0642 QUÉBEC INC QC Canada
MULTISOL INC. MB Canada
NEWTON P. G. FARMS INC. PE Canada
OYSTER & KING (A d/b/a of 1088115 B.C. Ltd.) BC Canada
ROYAUME DES DATTES (Faisant également affaire sous Sofiane A QC Canada
VIDA FRESH (A d/b/a of Vida Fresh Inc.) CA United States

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.

 

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Modernizing Canada’s Fresh Fruit and Vegetable Grade Standards

DRC’s initiative to modernize Canada’s Fresh Fruit and Vegetable Grade Standards is progressing well.

For context, the CFIA Canadian Grade Compendium Volume 2 – Fresh Fruits or Vegetables https://www.inspection.gc.ca/about-cfia/acts-and-regulations/list-of-acts-and-regulations/documents-incorporated-by-reference/canadian-grade-compendium-volume-2/eng/1519996239002/1519996303947 is the lexicon, or recognized language, for describing fruit and vegetable commodities and associated defects.

This common lexicon is necessary in order for federal inspectors, private inspection firms, buyers, sellers and others to communicate in a common language when they are separated by geographic distances. Grade standards establish minimum requirements and expectations for arrival condition, are the basis for establishing a breach of contract and are an essential business-to-business tool. Most countries have established domestic grade standards; the most in use are those in Canada, the United States, the UNECE and CODEX.

Review teams review the assigned grade standard and, reaffirming or amending previous industry recommendations for change, considering additional changes based on industry production and technology advances as well as a comparison with the corresponding US grade standards Reviews for apples, apricots, peaches, pears, plums and prunes, nectarines (new standard), carrots, greenhouse cucumbers, greenhouse tomatoes and potatoes have been completed. Proposed changes for asparagus, table grapes and onions are at the final endorsement stage and reviews for other crops are advancing. The initiative is not a competition with specs established in vendor/buyer contracts.

Next steps include a submission to CFIA under the Incorporation by Reference (IbR) provisions for their review and approval process. Upon completion of their review the CFIA notifies CODEX, WTO and other key stakeholders of the pending changes. It is expected that revised grade standards will be in effect for crop 2021.

For DRC, the Canadian and US fruit and vegetable grade standards are foundational to the Good Arrival Guidelines and Trading Standards, which serve to establish evidence in the mediation, arbitration and resolution of trade disputes.

For additional information about the project, contact Anne Fowlie (afowlie@fvdrc.com).

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DRC WEBSITE NEW MEMBERS ONLY PORTAL

It has been several months since we launched our redesigned and upgraded Members Only Portal. We would like to thank all our members who already visited it and provided valuable feedback that allowed us to make the experience even more user-friendly.

For those who didn’t have an opportunity to check out Members Portal yet, we would like to remind you of the many new features that are now available to you.

 You can now:

  •  Access membership related information:
    • Download/print your membership certificate (Go to Documents Tab -> Downloads)
    • Access membership directory to look up information about other members, pull reports by location and type of business, verify if your business partner is an active DRC Member, etc. (Go to Membership Directory Tab)
    • View membership related reports (active members, inactive members, sanctioned parties, etc.). (Go to Documents Tab -> Library)
    • Update your membership information and add new portal users within your company (Go to Membership Tab -> Membership Profile)
  •  Access billing information:
    • Download your current unpaid invoice (Displayed on Home Page)
    • Pay your membership fees (outstanding invoices are displayed on the home page once you are logged in or accessible in Membership Tab -> Membership Info)
    • Look up your past invoices and payments (Invoices for 2 previous years will be displayed as a summary. To download actual past invoices beyond 2 years, please contact our office)
  •  Access trading assistance information:
    • View your past/present disputes (Go to Disputes Tab -> View Disputes)
    • Request trading assistance

You can access Members Portal from our website at https://www.fvdrc.com/membership/member-login/ by clicking the “Login Now” button.

For first-time loggers, only primary contacts for the company have access to the portal. To create your password, enter your email address in Forgot Password section and click on “Send Password Reset Link”. You will instantly receive an email with a link to reset your password. You will only have to do this once.

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ARBITRATION DECISION BRIEF: Whether or not the return provided by Respondent was reasonable

Commencing this year, we will publish a summary series of arbitration decisions which will help members better understand how DRC Rules and Regulations apply in the event of a dispute. DRC Dispute Resolution Rules state that all DRC arbitrations are private and confidential. We have omitted the names of people, including arbitrators, as well as companies. DRC only acted as the administrator of the arbitration process, and did not participate during any hearings (if applicable), therefore this summary is based solely on the arbitrator’s written decision and may not reflect important information shared with the arbitrator through written briefs or verbal testimony

Case: DRC File #20205 –Parties Domiciled- United States and Canada

Facts:

  • Claimant sold to Respondent 1,152 cartons of cantaloupes size 9 rather than Jumbo size as agreed upon. The product origin was Guatemala and was sold at $10.00 F.O.B. Respondent informed the Claimant immediately upon arrival that he received 1,152 regular 9’s, not Jumbo 9’s as Respondent ordered and asked Claimant to pick it up.
  • A few days later, Claimant could not find a new customer for the cantaloupes. Claimant contacted the Respondent, authorizing them to sell the cantaloupes on Price After Sale (P.A.S.) without any discussion regarding a target price.
  • After Respondent sold the product, they submitted an account of sales and payment in the amount of $8,075.75. This payment was based on $7.00/case instead of $10/case as originally invoiced for the size 9 cantaloupes.

Issue:

Whether or not the return provided by Respondent was reasonable.

Arbitrator’s Analysis/Reasoning:

There was no disagreement the parties changed the original contract to a Price After Sale (PAS) transaction. PAS is a sale where no price has been agreed upon and is also sometimes referred to as open price sale or open sale. In the case of PAS, the buyer, after the product has been sold offers a return to the seller to settle a price

Claimant’s Sales Representative acknowledged there were shipping errors and destination market issues prior to agreeing to PAS.

Respondent’s account of sales show sale prices varied from $18-$23 over a10-day period from the date the product was received. These prices were lower than market reports. However, the sales are consistent with a lower quality and distressed market as acknowledged by Claimant’s Sales Representative.  

Claimant’s Sales Representative submitted a statement in which he acknowledged the return was reasonable. The statement included comments about poor market conditions. Therefore, it appears a settlement was agreed before Claimant initiated their claim through DRC.

Arbitrator’s Decision:

The claimant failed to prove their claim; therefore, their claim was dismissed.

DRC Comments:

While the arbitrator addressed all the matters presented in the arbitration process, the arbitrator based the arbitration decision on two main issues:

  • An agreement to change the original contract to a PAS transaction.
  • Claimant’s Sales Representative acknowledging sending the wrong cantaloupe size, lower quality, distressed market conditions, and a statement accepting the return offered by the Respondent.

Since the shipper acknowledge shipping the wrong cantaloupe size, no inspection was necessary to prove a breach of contract had occurred.

One important element that members need to know is that a salesperson from a company is considered a representative of the company that can make buy and sell decisions on behalf of the company. For more information regarding what sections of DRC Trading Standards applied to this dispute, you can review the following sections:

DRC Trading Standards:

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Have you paid your membership fees?

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. Beginning in 2021 you can pay your membership renewal fees by credit card through our Members Only Portal.

You can access Members Only Portal from our website at https://www.fvdrc.com/membership/member-login/ by clicking “Login Now” button. For first login only primary contacts get access to the portal. To create your password, enter your email address in Forgot Password section and click on “Send Password Reset Link”. You will instantly receive an email with a link to reset your password. You will only have to do this once.

 If you have any questions regarding your outstanding annual membership fees, please contact us asap at DRC Help Desk | +1-613-234-0982 | info@fvdrc.com

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Fred’s Corner: How Will You Remember 2020?

FCW – As I transition into full-time retirement, I will be contributing a series of musings to DRC Solutions Blog.

How Will You Remember 2020?

In a word, Sobering.   As January began, I had a new granddaughter (in the US) due in a few weeks, and my wife and I were looking forward to our trip to the Caribbean a bit later.   We also had plans in the works to celebrate my other granddaughter’s 7th birthday (who also lives in the US) at the lake. , What could be better! 

The DRC was celebrating 20 years in operation and filling its mandate as Canada’s dispute resolution authority and officially recognized in the now in force Safe Food for Canadians Regulations.  Plans for a refresh and celebrations throughout the year were underway, including plans to meet with and thank our members face to face for their support. 

Little did any of us know that a virus reported by the World Health Organization (WHO) on December 31, 2019, would consume 2020.   One month later, on January 30, 2020, the WHO declared COVID-19 a global health emergency, and weeks later on March 11, 2020 COVID-19 was declared a global pandemic. 

Do you remember what you were doing that week?   I was sitting in a grand ballroom at a dinner following an industry annual meeting.   Folks had flown in from all over. We did not yet know what social distancing was, and no one was recommending that the public wear masks! I shook the hand of many friends and of course the kiss on the cheek when appropriate.  How quickly things changed!

Trade shows cancelled.   Marketing plans were gutted and sent back to the drawing board.   Business trip budgets became investments in virtual technology and working from home a reality for many.  Toilet paper and Lysol wipes could have been used as currency!  A morning COVID-19 self-evaluation, face masks, hand sanitizers, and physical 6-foot distancing, became as routine as the morning cup of coffee.

Communication within and outside of the office had to and did change practically overnight.   From my vantage point, this industry, as it has always does, adapted and overcame.  Fruits and vegetables continued finding their way to consumers through different channels.    

How will our industry remember 2020?    I think it was the “year of the pivot.”   Pivot has become a buzzword in general business, but the fresh fruit and vegetable industry has defined it by reacting to an unforeseen threat that was poised to shake the stability of the current marketing and distribution chain. 

Thank you one and all for being heroes and keeping us fed.