Unfine Case

The Honey Story

UNFINE RICHARDSON

Table of Contents

Page | Contents |

2 | Issues and Case Overview |

3 | Alternatives |

4 | Recommendations |

5 | Modifications in relationship |

5 | Conclusion |

Issues and Case Overview

Unifine Richardson a Canadian based company purchases approximately one million pounds of honey annually. Richardson needs to choose a new supplier of honey. They are being restricted by the Canadian Food Inspection Agency (CFIA) because traces of chloramphenicol have been found in Chinese honey. This substance has been banned for use in food-producing animals. Unfortunately, it will take about 15 months to eliminate chloramphenicol traces from beehives. Therefore until the Chinese are able to find a viable means of testing their honey; they will not be exporting to the Canada and Europe markets. Richardson’s current distributer has been Harrington Honey; they stated that due to new import regulations they will not be using Chinese suppliers. Richardson needs to find a new supplier of honey. They currently have enough stock to sustain them for approximately 36 days. Harrington advised Richardson the three options to choose from:

| Honey Supplier Options |

1 | A 100% pure Canadian honey at $1.75 per pound CAD |

2 | A 100% pure USA honey at $1.10 in USA dollars (April 2002: 1 US Dollar = 1.63 Canadian Dollars) at $1.79 per pound CAD |

3 | A 50-50 blend of Canadian Argentinean honey at $1.42 per pound CAD |

In addition, due to the issues with the Chinese supply of honey the world markets have been significantly affect. The prices have increased and to lock down a specific price a long term contract would be required.

Alternatives

There are several alternatives that can be explored in the Honey sourcing case. The first alternative to consider would be option 3, the 50-50 Canadian Argentinean blend. This option has the lowest cost at only $1.42 per pound CAD. This option has the best price but there is an...