PMA, UNITED EXPLORE NEW MERGER POSSIBILITY

AMY I. STICKEL

SANTA BARBARA, Calif. -- The country's two major produce trade associations are exploring a merger of their organizations in response to persistent member criticisms about duplication of services.

The issue was scheduled to be on the front burner this past weekend at an executive committee meeting here of the Produce Marketing Association, where members of the board of the United Fresh Fruit and Vegetable Association were invited guests.

Insiders from both trade groups confirmed last week that the possibility of a merger of PMA and United was to be raised and closely examined during the meeting. It wasn't clear if the meeting would lead to further exploration or an immediate decision to take some action.

"I'm sure it will be a topic of discussion," said Bob Carey, president of Newark, Del.-based PMA, about the merger possibility. In an interview last week, Carey said the meeting represented a new emphasis on the possibility of a merger.

PMA and United have been working together for two years to try to respond to requests from within the produce industry that

the two associations eliminate duplications of programs and services. But questions about whether the industry even needs two associations still persist, and have now brought both trade groups to this juncture.

One industry observer told SN the meeting was to be devoted to exploring the idea.

"The major topic of the executive committee meeting will be to see if it makes sense to merge," said the source. "The question is, PMA has been quite successful as a retailer organization, and can one organization serve the interests of both retailers and grower-shippers.

"Those interests are not necessarily compatible," the source said. "It needs to be thought out whether any one organization can be all things to all people."

Carey said it would be premature to comment further on the possibility of a merger, since the weekend would be the first chance that PMA's executive committee has had to gather and officially discuss the issue.

Carey said officials at Alexandria, Va.-based United first raised the possibility of a merger with PMA in June, following United's annual board meeting. The PMA executive committee then invited United officials to its previously-scheduled meeting here to probe the issue.

Officials at United declined further comment last week about the meeting.

In a statement, United President Tom Stenzel said his association plans to maintain "regular communication" with PMA, to deal with the issue of "maximizing the mutual effectiveness and efficiency of all trade associations serving the fresh produce industry."

However, United Chairman Tim Fleming Sr., had specifically raised the possibility of a merger in a letter to United members dated July 31.

"One option may be a total consolidation bringing together the best of United and the best of PMA into a new national organization serving our industry. Or, it might be better to maintain two independent organizations and spell out their unique missions," wrote Fleming, who is also vice president of Strube Celery and Vegetable, Chicago.

At least one instance where the interests of the retail and the grower-shipper sides of the industry have been clearly incompatible was during the recent fight over the Perishable Agricultural Commodities Act, which has regulated the conduct of business between produce shippers and receivers for 65 years, ensuring practices such as prompt payment. Retailers were calling for its abolishment, but grower-shippers lobbied in its defense.

While PMA publicly supported maintaining PACA in some form, it was United who organized the fight to save it. The ensuing compromise left PACA afloat, but reformed to present less of a financial burden to retailers.

The issue of the duplication of association services was last raised loudly in 1993, in a letter from prominent industry members sent to both groups.