The Washington Apple Commission (WAC) has submitted a proposal for a settlement that would allow them to continue with limited operations.
The proposal, agreed upon by both parties involved in the case, would allow the commission to begin collecting a 3.5-cent assessment rate per box on Sept. 1 of this year for all varieties except Golden Delicious, Red Delicious and Fuji, which will start on Oct. 1. These funds would ensure the continued, though limited, operations of WAC. Under the proposed settlement, the commission would no longer be supplying any generic marketing services for growers, Larry Olsen, vice chairman for the U.S. Apple Association (USApple), said.
“The apple commission board will then have to make their budget allocations and the proposed settlement envisions as a part of this settlement, a program to continue accessing MAP (Market Access Program) to help develop export markets,” Olsen said. “Funding will also then be available and allocated from the 3.5 cents per box to fund USApple, the Northwest Horticultural Council, the Northwest Fruit Exporters, Washington State Horticulture Association and Tree TAC (Tree-Fruit Technical Advisory Council).”
Until the judge approves the settlement, Olsen said everyone is at a standstill.
“We are reviewing all of our programs and really tightening our belt; this is a waiting period at USApple because so much of our funding comes from Washington state,” he said. “With the demise of the Washington Apple Commission—as we’ve known it for the past decades—we have to be very careful until that funding from Washington state is once again secured.”
Judge Edward Shea, the judge in the WAC case, will consider the settlement at a hearing scheduled for July 15 after a notice is sent out to growers.
“There is a great deal of support in Washington state among both growers and shippers, but everybody is in a holding pattern until Judge Shea…approves the mediated settlement,” Olsen said.
Olsen said that if everything goes smoothly and Judge Shea approves the settlement, the 3.5-cent assessment would be assessed against the 2003 crop.
Though this is a time of unknown futures and limited funding, Olsen said that USApple continues to promote apples.
USApple is working on a revised budget and putting budgeted activities on hold until the settlement proposal is approved.
Olsen said that the events at WAC have been a shock to his system and those who work in the industry.
“Having served on the apple commission board for a couple of years, you can just imagine what it’s like to work your heart out for the apple industry and have the rug ripped out from underneath you,” he said. “It’s just such a shock for people who have worked for the apple commission for years to see this outstanding commodity organization gutted…For those of us that worked so hard for the growers at the apple commission, it really was a body blow.”
The events at WAC will make growers responsible for their own marketing—a move that will give them less visibility in the marketplace at a higher price, he said.
“The fear is that without a coordinated market strategy, it’s going to cost the grower more money for trade promotions and other market activities than when the apple commission was coordinating the approach,” he said. “More will be coming out of the grower’s pocket. It’s going to mean apples don’t get represented to the public like they have been in the past.
“There are people who think it’s a good thing—who think the generic promotions of Washington apples is a waste of money and only individual brands are worth promoting—it is a minority opinion,” he said.
As to how the decline of WAC will affect apple marketers across the country, Olsen did not have a ready answer; however, he did say that it will affect how marketers do business.
“Washington, as the market leader, has had a responsibility to promote the consumption of apples,” Olsen said. “Highly respected people in our industry, like the apple person of the year—Jim Allen—have publicly stated that it’s a bad thing.”
Allen, president of the New York Apple Association, said that the effects of the fallout from WAC will likely be felt by industry people as well as consumers.
“The industry needs that umbrella organization to keep the industry together and keep it from fragmenting,” Jim Allen said. “The Washington Apple Commission was a tremendous source of information for the consumers. Consumers might not be given as much information as they were in the past about the apple.”
Consumers will be affected in the way that they view Washington apples.
“The (Washington Apple) logo is highly respected, world-renowned,” Olsen said. That logo will still be available for the shippers to use, but there won’t be the advertising public campaigns to support the trade promotions.”
Most WAC employees have been laid off, and the commission is in wind-down mode. Welcome Sauer, president of the WAC, was unavailable for comment; however, Olsen said that Sauer resigned, effective July 31. The resignation was voluntary, and the position will most likely not be filled, Olsen said.
