An Organization and a Market
20 May 2008 at 4:39 pm Randy Westgren 3 comments
| Randy Westgren |
Yesterday I visited a unique auction in the small town of Roeselare, in Western Flanders. A cooperative organization of vegetable and strawberry growers, REO Veiling, operates a 7 hectare receiving and shipping facility that serves their members and buyers (wholesale, supermarkets, export) from all over northern Europe. The trading floor has six electronic Dutch auction clocks that operate simultaneously, two for the Roeselare site, two for a sister site in Mechelen, and two for small lots/direct delivery. Mechelen has a matching facility and there are dozens of remote terminals for buyers. Prices are pooled across lots within a given crop and quality category; all growers receive an identical payout, even if their particular lot of a given quality drew a higher/lower bid. All transactions clear within the day. All product is turned and shipped within 18 hours of delivery. The combined exchange has a 95% market share for Belgium.
The grower/owners pay the exchange costs from their revenues. This includes third-party grading and sorting and third-party production monitoring.They own a brand name in common for the top quality shipped from the facility (which earns a significant premium) and individual growers may pack for a private label and accept the pool price from the day of delivery. The exchange will collect from the private label buyer upon shipment from the auction warehouse.
A very innovative hybrid organization. I’ll have to formalize a case study.
Entry filed under: Food and Agriculture, Former Guest Bloggers, Institutions.
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Organizations and Markets 
1.
Bo | 21 May 2008 at 2:22 pm
I believe Ard-Pieter De Man at Eindhoven has done work in this area and on these very hybrids, however, where and if it has been published I am not sure…
2.
REW | 21 May 2008 at 4:33 pm
Thank you, Bo. I’ll contact Ard-Pieter about his work.
3. Quality and qualification: from fruits to CDOs « socializing finance | 22 May 2008 at 10:17 am
[…] 22, 2008 Randy Wesgren from Org and Markets offers an initial report about a wholesale fruit and vegetable exchange in Belgium. The market, if I understand correctly, […]