David and Goliath battle: Deane Proctor
A family-owned fruit and vegetable supplier is suing Lidl in a £2.7million claim that the German grocery giant destroyed his business.
Deane Proctor, founder and managing director of Proctor & Associates, is fighting a David and Goliath battle against the group, which has been aggressively expanding in Britain.
He claims he has been ‘stabbed in the back’ by Lidl, which cancelled or slashed orders with insufficient notice and poached his own suppliers from under his nose.
Industry experts say the case is important because it challenges the effectiveness of the Groceries Supply Code of Practice, which was set up amid concerns that supermarkets were bullying their suppliers.
According to Proctor, he nurtured a close relationship with Lidl over 20 years. He says the chain made use of his expertise when it initially 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 out of deals and abruptly dropping his produce.
He says that originally Lidl relied on him to help find new supplies of fruit and veg in Britain, and that he later scoured the world from South Africa to Thailand for new sources to help Lidl buy a range of goods out of season, from grapes and plums to coconuts and lychees.
‘There weren’t many suppliers [in Britain] that wanted to deal with the discounters at the time,’ said Proctor, who had set up his own business in 2003 and was keen to expand. ‘For a long time I helped to sell the idea of working with Lidl to the farmers.’
He said that the produce buyers at Lidl appreciated his expertise and contacts. Proctor claimed Lidl assured him that it would continue to use his services and he invested in his business on that basis.
At its peak, his firm delivered products worth almost £29million to Lidl in a single year.
But Proctor said that from around 2015 the attitude of Lidl’s buyers towards him ‘closed off’.
He said they began slashing orders and dealing with his farmers behind his back, including ones that he had worked with for years.
He said: ‘Here’s me thinking the challenge is to be more efficient, to invest in the business. I tried to do all of the right things. It felt like I had been stabbed in the back.’
His business with Lidl ended in June last year and his firm has now been forced to close down.
Proctor & Associates, based in Boston, Lincolnshire, is suing Lidl for £2.7million in damages.
Supermarket experts say his case is key because of the way it challenges the Groceries Supply Code of Practice, which was set up in 2013. The current Adjudicator of the Groceries Supply Code, Mark White, is said to be dealing with multiple arbitration proceedings related to similar complaints.
The Grocer magazine – the bible of the food and drink industry – said ‘suppliers and retailers alike’ are awaiting the outcome of the case.
Proctor told The Mail on Sunday he had had an informal meeting with a previous Adjudicator, Christine Tacon, but ‘came away feeling dejected’.
One supplier warned: ‘The problem is the Adjudicator takes any official complaint to the retailer – and that’s like the kiss of death to your business.’
Proctor said he had used cash held within his business to help his suppliers and growers to buy plant and machinery or to pay them quickly ‘if they had cash flow problems’.
He said the vast majority of the money he made was invested back in his company, including a £300,000 computer system installed in 2017.
In research by the Groceries Code Adjudicator, only just over half of Lidl’s suppliers said it dealt with them ‘fairly, in good faith and without duress’. That puts Lidl well behind Tesco, Sainsbury’s and Asda where seven out of ten suppliers said they were treated well. The figure was eight out of ten at German rival Aldi.
In 2019, Lidl said it would be investing a record £15billion in UK suppliers over the next five years and its longer-term contracts would ‘help give suppliers certainty and allow them to invest for the future’.
A Lidl spokesman said: ‘We are in the process of reviewing the claims and will be responding in due course.’
