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"Securing the continued existence of growers is our goal"

Belgium: Fusion of Mechelse Veilingen and Coöbra complete

On Thursday the 6th of December 2012, the horticulturists-shareholders of Mechelse Veilingen in Sint-Katelijne-Waver and Coöbra from Zellik-Asse approved the fusion between their fruit and vegetable auctions. Mechelse Veilingen was already the largest cooperative vegetable auction in Europe and arose from the fusion of MTV and CVG at the beginning of 1994. Coöbra is the largest chicory auction and is the result of a century if fusions between Brabant auctions and a more recent fusion in 2011 with Greenpartners in Sint-Katelijne-Waver.

The name of the new fusion auction will be announced on the 14th of December. The fusion will become operational starting the 1st of January 2013. Mechelse Veilingen and Coöbra will end 2012 with a joint turnover of over 300 million Euro. Together they will be worth 37% of the Belgian fruit and vegetable auctions, 70% of this is exported. For vegetables, the two auctions make up over 56% of the Belgian turnover, for fruit this is 4%. The new fusion auction is very strong in glass and open ground vegetables, chicory, organics and fine/forgotten vegetables.

The growers vote

Most of the 1,145 active member-producers are located in the provinces Antwerp, Flemish-Brabant and East-Flanders. On the other hand there are also 124 Dutch members who will supply their product directly through the fusion auction. With this fusion they hope to achieve a collaboration on a larger scale and a better negotiating position compared to the concentration of the European wholesale distribution and the export/import companies. In this way the fusion auction want to once again realise a fair price for its producers, offer a more extended product package to the buyers, optimise the infrastructure and logistics and control the costs. The collaboration with all the other fruit and vegetables suppliers in Belgium and surrounding countries remains absolutely necessary for the future.

The new organisation will realise this with 300 employees. "We want to integrate the two performing sales systems, Mechelse Veilingen's excellent clock, and Coöbra's effective sales team in equal measure, efficiently but also transparently," says Coöbra president Guy Callebaut. "The importance of the member-producers is the incentive for two financially healthy auctions are coming together."

Reactions of Chris de Pooter and Filip Fontaine

Manager Chris De Pooter of Mechelse Veilingen and Managers Filip Fontaine of Coöbra, who are taking over the management of the fusion auction together, agree that the fusion will add a larger scale advantage and a better sales platform for the growers. They emphasise the it is a market focussed fusion, which will play into the quickly changing demand more optimally. "We are uniting to be stronger compared to the developments going on among our foreign competitors," says president Leo Baestaens of Mechelse Veilingen, who will also be president of the new fusion auction. "It's about the income and the continued existence of our growers."

Two of the driving forces behind the fusion between Mechelse Veilingen and Coöbra are undoubtedly the respective managers Chris De Pooter and Filip Fontaine. They have been continuously busy with the growers interests, their income and the liveability of their companies, and this in a quickly evolving and whimsical market. Getting the best prices out of the market for the growers, that's what it's about. Getting a more balanced market, that's the driving force, and you can only strengthen it through cooperation. This isn't going to be easy, but Chris De Pooter and Filip Fontaine are clearly on the same wavelength and this is promising.

Filip indicates that combining the strong clock, the optimal logistic process of the Mechelse Veilingen and the 'lean-and-mean' and pro-active stance of Coöbra is a challenge. Another challenge was convincing our growers, but they clearly believe in it, this was obvious from the votes. Fusing and collaborating is based on trust."

A right price for the growers

"On the surface it seems obvious and it is the intention to get better prices from the market for our growers," says Filip Fontane. "Together we will be better able to realise the lowest costs possible." And Chris De Pooter adds: "Together you can push down the general costs, but you also strengthen your trading position. We can also offer a better total product package, so that the buyers can do 'one stop shopping', which saves and improves efficiency. Our supply of small products will become a lot more attractive. We will get big in small products. The fusion will supply a larger scale benefit and be a more certain sales platform for our growers. Insuring their continued existence is our goal." Both managers emphasise that the auction is from the growers, for the growers. "Together we will be able to better our research, services and producer support,' says Filip Fontaine.

Market focussed fusion

Chris De Pooter and Filip Fontaine emphasis that both cooperative auction do not feel financially forced into a fusion. "It's just better," says Filip. "It's a market focussed fusion. There has been a collaboration connected to LAVA, in the area of commercialisation. LAVA will remain important to us and, with only three partners, will work more efficiently. Uniformity will be easier."

"At the time there were two comparable cooperative auctions at the same location with MTV and CGV. That's why the fusion between them in 1994 was logical," explains Chris De Pooter. "Later Greenpartners also arose in Sint-Katelijne-Waver, but the approach was completely different. Since the fusion with Brava to Coöbra the situation has changed again. Coöbra is the same kind of auction as the Mechelse Veilingen, which means there are two comparable auctions active at the same location again." For Filip Fontaine the fusion between Coöbra and the Mechelse Veilingen was a logical next step. "On the demand side the fusion offers a lot of advantages for the buyers. They keep lots of choice options but the fusion is only an improvement on the administrative and service side." Chris Pooter confirms that the efficiency can improve markedly.

Besides Flandria the commercial brands such as Top, Bel'Orta, Speciality Street and BRAVA Chicory will continue to exist. These brands will be open to all the producers of the fusion auction permitted they are produced in a similar manner.

The power of the clock

The clock is and remains an important sales instrument, both managers confirm. Besides this, using LAVA remains an important price supporting instrument. "We reduce nothing," says Filip. "As far as classic vegetables are concerned at least 70% of the sales must go by the clock. There are other rules for top fruit and organics. We want to apply specific rules per product group." "The clock is still the best instrument towards price forming," says Chris. "We are noting a new evolution. Where before the wholesale distribution wanted long term contracts, they now want to play into the quickly changing demand with short term contracts. Changing prices in fresh products seems to attract customers. The consumer wants to make a bargain. Shopping has become a sport."

The full management

Improving quality

Filip Fontaine points out that due to more collaboration, which is the goal of the fusion, the quality can also be improved. "Especially the quality control will be better and more efficient and, paired with it, the services and guidance of the growers." "Quality is, of course, an important sales element," emphasises Chris De Pooter. "We aren't fusing to flatten out, but to get an optimal price for the grower from the market with premium quality."

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