Weekly briefing/teitelman/12 inches/LK1st/mark2nd
Like most segments of the food industry, the meat-packing business can be a challenging one, fraught with intense competition and razor-thin margins. Glen Rose, president of Vernon-based Rose Meat Services Inc., often faces an even tougher issue customers who don’t pay their bills. Rose spoke with Karen Teitelman about the difficulty of dealing with bad debts.
Rose Meats has been in business for 13 years. We are a full-line distributor of beef, pork and poultry, mainly serving independent Latino retailers around the Los Angeles area. We also service processors with raw materials for making beef jerky, pastrami and other stuff. We do some restaurant supplying as well, and export meats to Japan and Russia.
There’s a lot more meat coming into the market than there used to be, due to the advances in technology. Today, meat is produced much more efficiently just like cars, watches or any other commodity.
The biggest problem we’ve had over the years is the collection of bad debts. This is a business of high volume and small profit margins, which makes it a high-risk business. The laws in the area of collections are very weak. We had a market in the El Monte area that owed us $12,000 for goods they bought from us. In the beginning, they paid a little toward the debt, off and on, but then they stopped altogether. That’s when the real fun began.
When we went to court the first time, the court was too busy to hear the case, so they postponed it. The second time we went back, these people, who certainly spoke adequate English when dealing with us in the past, requested an interpreter, which the court couldn’t provide and so we were postponed again. The third time we went back, they had bankruptcy papers, so then the court had to take the time to review the papers.
It wasn’t until about two months later that we heard, through the mail, that they threw the bankruptcy plea out. Now, we were back in court for the fourth time, and we finally got a judgement against them for all fees, and they said they had no way of paying. And there is nothing we could do. We came to find out that the husband had declared bankruptcy once before. Now they have a restaurant somewhere else under a relative’s name, and there is nothing we can do.
The majority of the people who have businesses from little hot dog stands to large restaurants are good people. I have a lot of respect for them. And we certainly have compassion for anyone who has a problem. We will sit down and discuss things, try to work out some kind of payment. There’s just this small percentage of people who are out to intentionally commit fraud, and they seem to get away with it.
The only thing we can do is to be tough at the outset. We are very careful who we give credit to. We evaluate their credit worthiness and check their past carefully. We monitor our receivables on a daily basis by doing this, we are immediately aware of anyone who breaks their paying pattern. Thus, we address the problem right away and reduce our exposure to bad debts. I’d gladly work with and support any legislator who would be willing to address this injustice to the small-business owner.
