Cranberry Stressline

Archives

Feb. 22 - 29, 2000

 

 

On why Northland
did not support marketing
order,  by John Swendrowski

2/29/00 Northland Cranberries, Inc. has been an advocate of invoking the Cranberry Marketing Order to effectively limit the size of the domestic 2000 crop. Today at the CMC meeting in Washington D.C. we could not support the proposal that was advanced by Ocean Spray. CONTINUED | Easy to print version

Decas disputes Hawthorne's characterization of  CMC meeting and of independents

2/29/00 John Decas disagreed with Ocean Spray CEO Robert Hawthorne's statement about the cooperative's overriding interest being the financial interest of the growers where he says "we are completely alone in that regard." He disputes Hawthorne's allegation that independents are driven solely by profit and are not interested in what's good for their growers.  Decas, who as a member of the Cranberry Marketing Committee participated in the discussions yesterday and this morning, said that the final outcome was by no means as clear-cut as Hawthorne suggests. In fact, says Decas, there was an attempt made to reach an accommodation which would have resulted in a volume restriction recommendation being approved by the committee (as described by John Swendrowski  above); but Ocean Spray wouldn't accept a compromise so the entire volume regulation recommendation was voted down.

 

Editorial

2/27/00 Ocean Spray and the cranberry industry find that their problems have gone from bad, to worse, to worse than ever was anticipated. Large Ocean Spray growers are pitted against small growers in a battle that will see the ruin of the less fortunate. Ocean Spray itself seems to be so hell bent on  trying to "clobber the competition" that they are willing to use the small family farmer as cannon fodder. Taking a bite out of Northland's market share will do nothing to reduce the surplus. Rah rah cheerleading about how Ocean Spray will teach that cheeky upstart Swendrowski a lesson may inspire the troops; but it detracts from the far more difficult task of growing the market for all things cranberry.

Robert Hawthorne, who is by all accounts a top-notch CEO, is saddled with internal dissension and bad press that cannot help the image that Ocean Spray wants to cultivate with consumers.  First the proxy fight at the Annual Meeting, when the will of the Ocean Spray growers in Massachusetts was overturned, and then the decision by the Ocean Spray board to support a volume restriction, seems to demonstrates further insensitivity to the small farmer. First the small family farmers discovered that their votes were virtually worthless, and then they were told the board supported another 20-30% cut in their income.

The spectacle of the Ocean Spray wave crashing over and drowning small family farmers, who larger growers have called "hobby farmers", is a public relations nightmare. The S.S. Ocean Spray is listing badly and taking on water. Brilliant and resourceful management is needed to save her. But if she is saved at the expense of small family farmers, some of whom who will be forced to sell out for pennies on the dollar to their rich neighbors, and some of whom may go on to start their own cooperative with a true one member one vote policy, the damage to the once mighty S.S. Ocean Spray will take years to repair. Even if it manages to retain its legal cooperative status, the public will know that it is really agribusiness in coops clothing.

CONTINUED | Easy to print with no images


John Decas presents a scathing indictment of Ocean Spray on surplus

2/28/00 Using their own statements to make his case against a volume regulation to the Cranberry Marketing Committee, John Decas alleges that "Ocean Spray has pursued a course that has virtually bankrupted their company and their growers while falsely proclaiming since 1994 that they were capable of selling all the berries delivered to them, and that the surplus was caused by the Independents and that only Independents would be significantly harmed."

Not merely content to guess at the number of times that Ocean Spray spokesmen referred to the surplus as "outside" the co-op, Decas researched their own pronouncements and provided actual quotes. He presented the projections after the record 1997 harvest that the cooperative made to their growers regarding their ability to sell the crop "…by the year 2006 sales volume would increase 2 or 3 fold."

John Decas was the senior member of the Cranberry   Marketing Committee which is meeting in Washington this week to discuss and vote on a recommendation which will be presented to the Secretary of Agriculture on a volume restriction for cranberries. (He is now a member of the regulatory subcommittee.) Ocean Spray dominates the CMC with four member, is in favor of a volume restriction, and only needs one additional vote to obtain a majority. The cooperative has denied it is responsible for the surplus, blaming the independents, a contention that Decas disputes: "Ocean Spray cannot be allowed to characterize our industry problems as caused by the Independents while Ocean Spray stood by helplessly. The record suggests the opposite. Certainly, many Independents worked hard to keep their supplies and grower commitments in line with their sales." Read portion of presentation here | Easy to print version 


There are those who disagree with Stressline's editorial policy, and with articles written by those critical of Ocean Spray. Some believe that if they ignore Stressline, the problems discussed here will go away. For those who disagree, but believe in honest and educational debate, I remind them of my standing offer to publish their opinions. This includes Robert Hawthorne, who might follow in John Swendrowski and John Decas' footsteps, and participate in the discussion in Cranberry Stressline. This renewed invitation is certainly extended to all who supported the alternate proxy slate, including Craige Scott and the twelve signers of alternate proxy letter.

 

 

Ocean Spray Board supports
U.S. restriction on cranberry volume

SAN ANTONIO (Thursday, February 24, 2000) -- Ocean Spray's Board of Directors today voted unanimously in favor of asking the U.S. Secretary of Agriculture to set a restriction on the volume of fruit brought to market this fall –– a move that would help offset the current oversupply of cranberries.

The four Ocean Spray members of the eight-member USDA Cranberry Marketing Committee (CMC) have been authorized by the Board to vote in support of a formal request for a temporary volume regulation. The CMC meets next Monday in Washington, D.C. If six of the eight members vote to make that request, the USDA will have 30 to 60 days to decide. The issue will be open for public comment during that period. CONTINUED | Easy to print version


Proxy fight hits mainstream media, Cape Cod Times publishes article

2/22/00 The Cape Cod Times became the second newspaper to publish an article on the Ocean Spray proxy fight. Read the article  HERE. | New Bedford Standard Times republished Robin Lord's article from their sister paper

2/18/00 The Boston Herald went online in the early hours of the morning with an article entitled Ocean Spray bogs down over cuts (click here). Brian Handy (MA), one of the signers of the letter promoting the alternate slate, denied that the inclusion on the board of two members from his state who would owe their election to voters from outside the state might result in Massachusetts shareholders having less influence on the board. He is quoted as saying that "every area will still be represented." He explains that the reason he supports the alternate slate is his fear that the nominees on the company slate may be more inclined to sell the company.


Hatton asks supporters to choose another

2/16/00 Donald Hatton has requested that those supporting him on the alternate proxy slate consider supporting another candidate. In a letter sent to members of the Ocean Spray board and widely disseminated, he cited the appearance of partisanship in his role in chairing the annual meeting. He also indicated unspecified personal reasons for not actively seeking reelection to the board.

He did not, however, unequivocally rule out accepting the results of the election should his supporters vote him in. Neither did he ask them to support his opponent Daryl Robison, or another candidate not currently on either proxy, to represent Oregon and Washington. If Robison receives less votes than the eleven other candidates, there will be nobody on the board from that region.

gen_sherman_sm.jpg Hatton expresses strong support for shareholders to vote as they choose,  but he appears to express some ambivalence in saying that he "thinks" he's made the right decision rather than making the Shermanesque statement "if elected I will not serve." (attributed to Civil War Gen. Sherman, photo above right) His letter does not endorse the company slate even though he is the current chairman of the board.

Ocean Spray grower-owners on the west coast are expressing doubt as to whether Hatton would actually refuse to serve if he won, suggesting that he could claim a mandate from the shareholders to continue on "for the good of the company." Hatton indicates that his primary focus needs to be on chairing the annual meeting, therefore, since the results of the elections won't be announced until after the Annual Meeting, he can state that he met his goal at that time and agree to serve, claiming that his conscience is clear. Easy to print version


12 months of media coverage
Newspaper coverage continues

Weekend Media

NEW Local Growers upset over shift in power: Massachusetts loses out to Wisconsin in a successful proxy fight led by outsiders - 2/26/00 Cape Cod Times

From the article under the subhead An issue of 'personal animosity': Wisconsin grower Paul Jonjak, who attended the meeting, said fallout from the proxy fight was evident, and he is puzzled by it. "I don't think the directors have much influence. They don't actively direct the company. They choose the CEO and monitor his performance, but management directs the company," he said. Jonjak said the proxy fight was "not as much about business issues as it was personal animosity."

He said many growers outside of Massachusetts believe there is a large group of vocal Massachusetts growers who have strongly expressed their concerns about the company and the industry in general."I felt as if people did not like that," he said. Jonjak said new Ocean Spray Chief Executive Officer Robert Hawthorne was well received and that the majority of growers left "feeling the company was in good hands." He said he is hopeful the wounds from the proxy battle can be healed, "because when an industry's in trouble, you don't get anywhere by fighting." Link to article

Ocean Spray moves to stunt cranberry glut -  2/26/00 Patriot Ledger (MA)

Northland, Ocean Spray, seek cranberry production limits - 2/26/00 Milwaulkee Journal Sentinel

12/25/00 Not since the amino triazol scare has the cranberry industry recieved such intensive coverage in the media. Beginning after the 1999 Ocean Spray annual meeting when the drastic price reductions were announced, the coverage continued through the year. It came to be called "the crisis in cranberries" as newspapers and television news reported on one event after another. Even French television sent one of their top reporters to Massachusetts to film a report.

"Feel good" stories during harvest time were replaced by front page articles describing the financial plight of farmers and the problems and management changes at Ocean Spray.

Now the media is covering both the marketing order and the aftermath of the proxy fight at Ocean Spray:

2/25/00 Boston Globe article

2/25/00 Boston Herald article


O.S. Voting Results

2/24/00 The board has elected Sherwood Johnson of Florida as Chair and Ray Habelman of Wisconsin as Vice Chair.

New board members: Douglas Beaton, Ben Gilmore, Ray Habelman, Robert Hawthorne, Sherwood  Johnson Stephen Lee, Chris Makepeace, Ralph May, Francis Podvin, Martin Potter, Daryl Robison and E. Ray Smith, Jr.  All of the Items passed with the exception of number two, which would reduce the percentage of voting shares from 3/4th to 2/3rds to approve a merger or sale. A super majority is very difficult to achieve, so this result suggests a victory for those opposed to selling or merging the company. The passage of number five means that Garfield DeMarco (NJ), the only member who refused to resign, will be removed from the board, enabling Stephen Lee to be seated.


Oregonian covers cranberry crisis

2/24/99 Oregon's largest newspaper reports on the economic hardships facing cranberry growers and the threat that some may be facing bankruptcy. Read story here.


Decas letter urges growers to oppose marketing order

2/22/00 In a letter to his growers, John Decas explains his case in opposition to a cranberry marketing order, offers his recommendations, and asks growers to lobby against a volume regulation. Read his letter HERE | Easy to print version.


Editorial

Avoiding another Alamo

2/21/00 When Chip Morse was in Wisconsin for a meeting with Ocean Spray growers and board members, he also met with John Swendrowski, President of Northland Cranberries, Ocean Spray's primary competitor in the cranberry juice business. During the Ocean Spray meeting, Morse challenged Ocean Spray board member Jeff Kapell on Kapell's interpretation of David Harding's explanation of the Bain Consulting investigation. Sources have told Stressline that this did not endear Morse to influential Ocean Spray Wisconsin growers. Morse became a target of the group calling for an alternate proxy to be elected to comprise the new down-sized board which would eventually include eleven growers, the CEO, and three outside directors. The meeting with Swendrowski proved to be just the excuse needed to effectively rally support against Morse, especially in Massachusetts. CONTINUED | Easy to print version


Boston's Fox News unfairly, erroneously, attacks Federal grant for cranberry research
by Hal Brown
(Images can be enlarged by clicking).

 fox_strangestudies.jpg (21013 bytes)2/19/00 Boston's Fox affiliate, Channel 25, broadcast a segment on the 10PM News last night blasting a Cranberry Experimental Station project on determining what determines anthocyanin levels in a segment called "Strange Studies: Costing you Money." While other so-called "pork barrel" projects were discussed, the segment was promoted all day on Fox 25 as exposing how tax payers money was being wasted on a study to determine why cranberries are red. The background image for the story was of a lab beaker of cranberry juice. CONTINUED |  To print without images Click Here.

Article © Hal Brown, 2000


Editorial

Ocean Spray Annual Meeting Convention

2/15/00 Beverage industry analyst George Dahlman, of Piper Jaffray, likens the proxy fight for several seats on the Ocean Spray board to a political nomination process, where candidates are nominated but the ultimate election is decided at a convention. This is an apt comparison. The question is whether or not this is  what the Ocean Spray "electorate" really wants. CONTINUED | Easy to print version


HOME