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harvesting, and packing costs are the main services that caused
commission rates to be on the high end of the range. Dr. Cook
further stated that some U.S.-based distributors also offered
extensive technical assistance in the form of production methods
to their Mexican growers, and many had field staff operating in
Mexico. She asserted that where those costly services were
provided, they were reflected in the commission rates, sometimes
reaching 10 to 12 percent. According to Dr. Cook, when a
distributor does not provide grower financing, the range is more
likely between 5 and 10 percent; and when production-related
technical assistance is not involved, the range tends to be
between 5 and 8 percent. She stated further that volume, i.e.,
the overall size of the deal, also significantly affects the
rate. Dr. Cook stated:
In this case, it was SCP/Dole that funded advances to
the Related Growers and thus bore the cost of tying up
this capital. In addition, the SCP Deal was a large
volume deal and economies of scale were applicable.
GAC provided no production technical assistance or
field personnel; while Dole itself performed part of
the marketing services, via loaned salesmen and trade
advertising.18 Given these factors, GAC would not be
expected to receive a commission at the upper end of
the industry range. Rather, it is my opinion that
given the large expected volumes and unique character
of the SCP Deal, if a percentage commission rate would
have been utilized, it would likely have been on the
lower end of the typical range observed in Nogales,
approximately 6 percent.
18Dole provided one to two salesmen that worked at GAC's
office in Nogales selling produce for GAC. These salesmen
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