BC Tree Fruits Cooperative

Last updated
BC Tree Fruits Cooperative
Company typeGrower-owned cooperative
IndustryFood and beverage services
Founded1936 [1]
Headquarters
Kelowna
,
Canada
Area served
 Okanagan, British Columbia
Revenue$55.7 million (2023)
Members230 (2024)
Number of employees
242 [2] [3]  (2024)
Website http://www.bctreefruits.com

The BC Tree Fruits Cooperative is a grower-owned cooperative based in the Okanagan region of British Columbia. [1] It processed, stored, packaged, and sold fruit. It had more than 230 member farms in 2024. [4]

Contents

After operating for almost 90 years, in July 2024 the co-op announced that it was dissolving and seeking court direction to liquidate its assets. [1] As reasons for the closure, the company cited "extremely low estimated fruit volumes, weather effects and difficult market and financial conditions". [1] [5]

History

The BC Tree Fruits Cooperative was founded in 1936. [1] The co-op stored, packed, and sold fruit produced by its members (growers and orchard owners) in the Okanagan region of British Columbia. [6] It's operations expanded to include a fruit grower equipment supply company, a fresh fruit market in Kelowna and, in 2014, a craft cider company. [1]

For decades, the BC Tree Fruit Cooperative was known to consumers across Canada for its bright green leaf logo that adorned fruit packaging and apple stickers. [1] The co-op's slogan was "Look for the Leaf". [4] In 2017, BC Tree Fruits Cooperative had 430 grower members. [7]

In 2022, there was opposition from a large proportion of the co-op's membership to decisions made by the board of directors on the sale of co-op assets, and the decision to shutter the Lake Country fruit packing house (which forced central and north Okanagan growers to ship their fruit to Oliver in the south Okanagan). [1] At a special general meeting in November 2022, growers voted 59% in favour of removing the entire board, a result that was short of the required two-thirds majority. [8] A special general meeting on 5 February 2024 saw 70% of the co-op's voting members reject motions that aimed to unseat four of the board's ten members and change the decision-making process regarding property sales. [9]

Closure

In July 2024, the cooperative said it would no longer receive fruit at its packing facilities and advised members to find an alternative to market fruit for the balance of the season. [1] The co-op was dissolving due to decreased fruit volumes from adverse weather events, increased competition, a reduction in grower members, and aging facilities. [2] : 14  [1] [5] In 2024, many Okanagan fruit farmers faced catastrophic crop losses from poor weather that included a cold snap in January that wiped out almost all the Okanagan valley's peach, apricot, and nectarine crops, and severely damaged cherry orchards. [1] [10] The co-op's primary revenue source was from the sale of apples (followed by cherries and other fruits), and apple volumes declined significantly from 122 million pounds in 2018 to 60 million pounds in 2023. [2] : 14  The company sought to right-size its operations through sales of surplus real estate and modernization of its operations in a new facility located in Oliver, but overall bank indebtedness rose through 2024. [2] : 14 

Protests

Industry representatives and growers protested the closure of BC Tree Fruits, asking the British Columbia government to intervene. [11] [4] Some wanted the province to backstop a loan to allow the co-op to reopen, at least through the 2024 harvest. [5] Protesters argued that private packers did not have the capacity to take all the fruit being produced; and that, unlike BC Tree Fruits, private packers do not provide a guaranteed price. [12] However, others argued against the co-op taking on more debt and the associated interest costs, noting that more than half of the grower members had already found an alternative packing or storage facility. [13]

Bankruptcy proceedings

BC Tree Fruits Cooperative filed for creditor protection in August 2024. [4] Court documents showed the co-op owed $53,236,756.41 to secured creditors. [13] [5] Overall debts were reported to be around $65 million. [14] The Supreme Court of British Columbia ordered the sale of the co-op's assets, and equipment asset sales concluded on 4 September 2024. [14]

At the court hearing on August 26, the lawyer for the creditor protection monitor said there were expressions of interest from buyers for some of the co-op's plants and the sale of its Vaughan Avenue, Kelowna, plant was finalized for $22 million. [15] [2] : 23  Bidding deadlines for assets were to close by November because of the interest in properties and the need to provide processing and storage facilities for the 2024 harvest season. [15] [16]

On 6 September 2024, Kelowna-based Novem Pharmaceuticals offered to purchase BC Tree Fruits Cooperative's Sexsmith Road storage facility in Kelowna. [16] The company said it obtained an emergency lease that would run through the fruit season, or upon closing of the purchase transaction, in order to allow the tree-fruit industry to store their fruit in the facility and avoid the loss of as many as 25 million pounds of apples. [16]

On Thursday September 12 the British Columbia government said the Investment Agriculture Foundation of B.C. (which is responsible for delivering many government-funded agricultural programs [17] ) would direct about $4 million to pay co-op members amounts they are owed by BC Tree Fruits, and it would recoup the funds at the end of the court process. [4] [18]

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References

  1. 1 2 3 4 5 6 7 8 9 10 11 Strachan, Brady (26 July 2024). "B.C. Tree Fruits Cooperative shuts down after 88 years: Grower-owned co-operative cites low fruit volumes, weather impacts and difficult financial conditions". CBC News.
  2. 1 2 3 4 5 "In the Supreme Court of British Columbia, In the Matter of the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36; and In the Matter of the Cooperative Association Act, S.B.C. 1999, C 28; and In the Matter of BC Tree Fruits Cooperative, BC Tree Fruits Industries Limited and Growers Supply Company Limited; Petitioners: First Report of the Monitor Alvaez & Marsal Canada Inc" (PDF). 22 August 2024.
  3. ↑ "BC Tree Fruits Cooperative". Linkedin.
  4. 1 2 3 4 5 "B.C. offers $4M support to tree-fruit growers after co-op closure". CBC News. 13 September 2024.
  5. 1 2 3 4 "Growers call for gov't intervention amid B.C. Tree Fruits' closure: Protesters gathered in Kelowna on Tuesday to voice their concerns". CBC News. 20 August 2024.
  6. ↑ "RDOS Board members tour BC Tree Fruits facility in Oliver". Regional District of Okanagan-Similkameen. 29 February 2024.
  7. ↑ "New Directors Elected for BC Tree Fruits Cooperative". Orchard & Vine Magazine. 30 October 2017.
  8. ↑ Walker, Tom (23 August 2023). "BC Tree CEO on leave". Country Life in BC.
  9. ↑ Mitham, Peter (7 February 2024). "BC Tree Fruits board remains intact". Country Life in BC.
  10. ↑ Femia, Victoria (26 July 2024). "'Not good news': Farmers stunned as BC Tree Fruits announces surprise closure". Global News.
  11. ↑ "1,800 sign petition to save BC Tree Fruits". Kelowna Daily Courier. 15 August 2024.
  12. ↑ "Farmers gather in Kelowna to protest BC Tree Fruits closure". Global News. 16 August 2024.
  13. 1 2 Femia, Victoria (28 August 2024). "Court orders BC Tree Fruits to sell all assets, growers fear imported fruit take-over". Global News.
  14. 1 2 Riemenschneider, Pamela (5 September 2024). "BC Tree Fruits assets auctioned". Produce Blue Book.
  15. 1 2 Lazaruk, Susan (27 August 2024). "Court orders asset sale by troubled B.C. Tree Fruits Co-operative". Penticton Herald.
  16. 1 2 3 Gibson, Rob (6 September 2024). "Company to take possession of BC Tree Fruits cold storage facility in Kelowna on emergency basis".
  17. ↑ "About Us". Investment Agriculture Foundation of B.C.
  18. ↑ Barnes, Gary (17 September 2024). "'Our members deserve better': BC Tree Fruits workers owed wages, benefits". Nelson Star.
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