Lidl ruined my business, says boss in £2.7m fight: They stabbed me in the back, fruit and veg boss rages in David v Goliath case
- Deane Proctor fights the supermarket, which has grown in Britain
- He claims Lidl canceled orders with insufficient notice and poached suppliers
- The case calls into question the effectiveness of the grocery supply code of practice
Battle of David vs. Goliath: Deane Proctor
A family fruit and vegetable supplier is suing Lidl in a £2.7million claim that the German grocery giant destroyed its business.
Deane Proctor, founder and managing director of Proctor & Associates, is waging a David and Goliath battle against the group, which has grown aggressively in Britain.
He claims he was “stabbed in the back” by Lidl, which canceled or reduced orders without sufficient notice and poached its own suppliers from under its nose.
Industry experts say the case is significant because it calls into question the effectiveness of the grocery sourcing code of practice, which was put in place as supermarkets bullied their suppliers.
According to Proctor, he had a close relationship with Lidl for 20 years. He says the channel made use of its expertise when it first launched in the UK market and its presence here was much smaller.
But the 57-year-old claims that as Lidl grew in Britain it repaid him with ingratitude, cutting him from contracts and abruptly dropping his products.
He says Lidl originally relied on him to help find new fruit and vegetable supplies in Britain, and later traveled the world, from South Africa to Thailand , seeking new sources to help Lidl source a range of off-season produce, from grapes and plums to coconuts and lychees.
“There were not many suppliers [in Britain] who wanted to deal with discounters at the time,” said Proctor, who started his own business in 2003 and wanted to expand. “For a long time I helped sell the idea of working with Lidl to farmers.”
He said buyers of Lidl products value his expertise and contacts. Proctor claimed that Lidl had assured him that he would continue to use his services and he invested in his business based on this.
At its peak, his company delivered products worth nearly £29million to Lidl in a single year.
But Proctor said that from around 2015 the attitude of Lidl buyers towards him had become “closed”.
He said they had started cutting orders and dealing with his farmers behind his back, including those he had worked with for years.
He said: “Here I am thinking the challenge is to be more efficient, to invest in the business. I tried to do all the right things. I felt like I had been stabbed in the back.
His business with Lidl ended in June last year and his business has now been forced to close.
Proctor & Associates, based in Boston, Lincolnshire, is suing Lidl for £2.7 million in damages.
Supermarket experts say his case is pivotal because of the way he challenges the Grocery Sourcing Code of Practice, which was put in place in 2013. The current arbiter of the Grocery Sourcing Code , Mark White, would deal with several arbitration proceedings related to similar claims.
Grocer magazine – the bible of the food and drink industry – said “suppliers and retailers” are awaiting the outcome of the case.
Proctor told the Mail on Sunday that he had an informal meeting with a former referee, Christine Tacon, but “came away discouraged”.
One supplier warned: ‘The problem is that the arbitrator takes any official complaint to the retailer – and it’s like the kiss of death for your business.’
Proctor said he used the cash held in his business to help his suppliers and growers buy plants and machinery or to pay them quickly “if they had cash flow problems.”
He said the vast majority of the money he made was plowed back into his business, including a £300,000 IT system installed in 2017.
In a study by the Groceries Code Adjudicator, just over half of Lidl’s suppliers said it treated them “fairly, in good faith and without coercion”. This puts Lidl far behind Tesco, Sainsbury’s and Asda, where seven in ten suppliers said they were treated well. The figure was eight out of ten at its German rival Aldi.
In 2019, Lidl said it would invest a record £15 billion in UK suppliers over the next five years and that its longer-term contracts would “help give suppliers certainty and enable them to invest for the future.
A Lidl spokesperson said: “We are reviewing the complaints and will respond in due course.”