Memo 8 ~ Do Mole Valley policies meet the needs of south west farming members in 2007 ?
Updated 20th July 2007
The official answer to this question will cite the hard evidence of consistent annual increases in Mole Valley’s sales figures. Just as Tescos, Jewsons, Primark and others fulfil the needs for their customers, so does Mole Valley for its predominantly rural clientele, now extending right across the southern half of England. This, coupled with continuing profitability, adds up to an impressive record of commercial success which deserves appreciation for the hard work it must involve.
This success however does not provide an answer to the key question posed in this Memo. Here in the south west one hears with increasing frequency that “Mole Valley seems to have lost the plot!” Although comparatively modern, this expression is used by a wide range of ages from 20’s to over 80’s and usually followed by references to buying less of their farming needs from Mole Valley, due to better prices offered by several alternative suppliers.
In spite of this Mole Valley continues to expand its sales through acquisitions, and expanded farm calling sales staff and a range of intensified promotional and presentational skills. The high capital and operational costs involved in achieving this sales growth are reflected in the 250% increase in Mole Valley’s administrative expenses, from £7.5m to £26.2m, over the ten-year period 1996-2006.
Far from achieving economies of scale to any material extent, analysis of MVF and subsidiary reports and accounts shows a picture of declining economic efficiency, click on Memo 5 for more detail. Many of the beneficiaries from current policies do not live or farm in the south west, as indicated by SCATS branches expanding their sales last year by twice the rate of MVF branches – undoubtedly helped by MVF subsidizing SCATS to make farm input sales to non-members at Mole Valley prices and on monthly account.
To attempt an answer to the question posed, it is plainly true that Mole Valley does still meet some of the needs of many of its farmer members in the south west. The underlying policies however appear to be responsible for eroding many of the price advantages to members, on which MVF built its earlier reputation. This is the result of two inter-related factors – expansion elsewhere in the UK and seemingly runaway escalation of admin expenses.
This website argues that Mole Valley policies must be changed radically towards a re-focus on the needs of its own hard-pressed farmer members, in its core trading area.
Unless difficult decisions are taken the new retrospective rebate system introduced in June and initially welcomed on this web site will not be sufficiently funded to operate at a meaningful level for all farming members. Similarly, other associated opportunities for strengthening Mole Valley’s cooperative relationship with its existing members will not be achievable.
Restructuring may involve downsizing in some areas and this is always particularly difficult to face up to. Decisions rest with our elected Mole Valley Directors, whom this web site can only express the hope that serious review will be given to remedial options.
Surely these have to include a moratorium on further geographical expansionist ambitions?