By Mihir Dalal and P.J. Huffstutter
(Reuters) – Some California farmers plan to stop selling their walnuts to Diamond Foods Inc in the wake of an accounting scandal over grower payments that has claimed the jobs of the snack company’s chief executive and chief financial officer.
Six small walnut growers told Reuters they would stop supplying Diamond when their contracts expire because they say the company has been underpaying farmers. Three of those growers said they hoped to break their contracts early.
Diamond declined to comment on its relationship with growers. The company this week said it had to restate earnings for 2010 and 2011 after its audit committee found that it had improperly accounted for payments to walnut growers.
The walnut growers Reuters spoke to said they know of more than a dozen other growers who also want to terminate their relationships with Diamond. While that is still a fraction of the roughly 1,000 growers who supply Diamond, if there is an Exodus, it could hurt the company’s ability to fulfill orders or force it to pay more in an increasingly competitive market.
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as in imperial sugars’ case,the very people they were buying from, went from being suppliers, to vulture ipsu’s customers, directly behind their back. thus undercutting prices that were/are already in place. these very growers are circumventing the processors and trying to sell directly to ipsu’s customer base……it’s fucking insane……… how many farmers/farms grow one crop only to have one customer,,,,,,, wmt. these 2 companies correlate in 2 different ways ? no, by no means they have both been accused of either cooking the books,or underpaying the growers. but one thing is for sure that no one see’s,is that some where,some one or thing wants these 2 companies gone. both companies have a low float,very tempting for any shark.