Lidl has ruined my firm says boss in £2.7m fight

A family-owned fruit and vegetable supplier is suing Lidl in a £2.7 million claim that the German supermarket giant has destroyed its business.

Deane Proctor, founder and managing director of Proctor & Associates, wages a battle between David and Goliath against the group, which is aggressively expanding in Britain.

He claims he was ‘stabbed in the back’ by Lidl, which canceled or canceled orders with insufficient notice and snatched its own suppliers from under its nose.

Industry experts say the case is important because it questions the effectiveness of the Groceries Supply Code of Practice, which was created over concerns that supermarkets are bullying their suppliers.

According to Proctor, he had a close relationship with Lidl for 20 years. He says the chain drew on 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 rewarded him with ingratitude, leading him to run out of deals and abruptly drop his products.

He says Lidl initially relied on him to help find new supplies of fruit and vegetables in Britain, and later scoured the world from South Africa to Thailand for new sources to help Lidl sell a range of goods out of season, from grapes and plums to coconuts and lychees.

“There weren’t many suppliers [in Britain] who wanted to do business with the discounters at the time’, says Proctor, who had set up his own company in 2003 and was eager to expand. “For a long time I helped sell the idea of ​​working with Lidl to the farmers.”

He said Lidl’s fresh produce buyers appreciated his expertise and contacts. Proctor claimed that Lidl had assured him it would continue to use its services and that he had invested in his business on that basis.

At its peak, his company supplied products worth nearly £29 million to Lidl in a single year.

But Proctor said that from about 2015, Lidl’s buyers’ attitude towards him was “closed off.”

He said they started canceling orders and dealing behind his back with his farmers, including those he had worked with for years.

He said, ‘Here I think the challenge is to be more efficient, to invest in the business. I tried to do all the right things. It 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.

Grocery experts say his case is critical because of how it challenges the Groceries Supply Code of Practice, created in 2013. The current Adjudicator of the Groceries Supply Code, Mark White, is said to be facing multiple arbitration proceedings related to similar complaints.

The Grocer magazine – the bible of the food and drink industry – said “suppliers and retailers alike” are waiting for the outcome of the case.

Proctor told The Mail on Sunday that he had an informal meeting with a previous juror, Christine Tacon, but “came away dejected.”

One supplier warned: ‘The problem is that the Adjudicator takes every official complaint to the retailer – and that is like the death knell for your company.’

Proctor said he used cash in his business to help his suppliers and growers buy plants and equipment or pay them quickly “if they had cash flow problems.”

He said the vast majority of the money he made was reinvested in his business, including a £300,000 computer system installed in 2017.

Research by the Groceries Code Adjudicator found that just over half of Lidl suppliers said it treated them ‘fairly, in good faith and without coercion’. That puts Lidl well behind Tesco, Sainsbury’s and Asda, where seven out of 10 suppliers said they were treated well. At the German rival Aldi that was an eight out of ten.

In 2019, Lidl said it would invest a record £15bn in UK suppliers over the next five years and that its long-term contracts would ‘give suppliers security and enable them to invest in the future’.

A Lidl spokesperson said: ‘We are assessing the claims and will respond in due course.’