Table 12,--Factors determining negotiated prices 
for containers and packaging supplies purchased by 
fruit and vegetable cooperatives, 1965 
Number of Percent of 
Factor times ronal 
mentioned 
Volume of purchase ..ccee. 8 40 
Competitive condition in 
container industry. ..ccoce 2 10 
Specifications of container... 4 20 
Length of contract period ... Z 10 
Warehousing agreements, ... 1 ty) 
Delivery capability. ....... 1 5 
Possibility of coordinating the 
timing of production run 
with that of another pro- 
CESS OL saveteietereters ers) erslcie 1 5 
LUCK 4 sec 5:6 bcos eee 
sMOlalevececeisis s' e's 61 «6.6 20 100 
CASH DISCOUNTS 
The availability of some type of discount for 
prompt payment is a generally accepted prac- 
tice in the container industry. Eighty-seven 
percent of the cooperatives contacted reported 
the availability of a discount for prompt pay- 
ment. When available, 90 percent of the pro- 
cessors took advantage of the discounts. Those 
who did not take full advantage of the discount 
failed to do so because of the general financial 
condition of the company or a shortage of 
working capital. One cooperative reported its 
payments were made on a negotiated basis 
three times a year. 
The most common type of discount available 
on all types of containers was the standard 1 
percent for cash within 10 days--net 30 days 
(table 13), Approximately 65 percent of the 
cash discounts reported for cans and glass 
were for 1 percent. The remaining 35 percent 
varied between 1 and 2 percent. 
An additional discount of 1.5 to 2 percent at 
the end of the year was also available on cans 
only to some of the larger cooperatives if all 
orders were discounted at 1 percent throughout 
the year. This allowed for a maximum total 
cash discount of 2,5 to 3 percent if all con- 
ditions were met, 
Eighty-five percent of the cash discounts 
reported on corrugated cardboard containers 
were for 1 percent. Terms ranged from cash 
within 10 days to 30 days. Thirteen percent 
reported they were negotiated with each con- 
tract, 
Cartons for frozen fruits and vegetables, 
labels, and other items were normally dis- 
counted on a 1-percent basis. 
QUANTITY DISCOUNTS 
Various forms of quantity discounts, broker- 
age allowances, and warehouse allowances 
were available to 50 percent of the reporting 
cooperatives. Discounts of this type were 
more often available on standard items such 
as cans and corrugated cardboard cartons than 
on items of lesser volume such as glass, poly 
bags, labels, and cello overwrap. 
Quantity discounts were amore integral part 
of the pricing system in areas of the greatest 
concentration of processing such as parts of 
California, Oregon, and Florida. In areas with 
lesser concentration, such as parts of Michi- 
gan, Pennsylvania, New York, and all other 
States covered by personal interviews, quantity 
discounts were less prevalent. 4 
With the prevalence of established list prices 
for standard-type containers in the processing 
areas and the competition among container 
manufacturers, the various types of quantity 
discounts provide some measure of price dif- 
ferentiation between container manufacturers. 
Discounts also provide some flexibility for 
negotiations between the processor and sup- 
plier. 
4 This is partially reflected in a comparison of data 
obtained from the mail survey with data obtained from 
personal interviews, Only 30 percent of those contacted 
by the mail survey reported the availability of any 
form of quantity discounts compared with 60 percent 
of the processors contacted by personal interview, 
15 
