Farmer stuck with 1200 extra crocs as skin deal goes belly up
A MAREEBA crocodile farmer has claimed he is owed more than $1.8 million by a luxury Italian leathergoods company after a deal went sour and left him with 1200 extra crocs.
Melaleuca Crocodile Farm co-owner Juergen Arnold has lodged documents in the Cairns Supreme Court claiming Italven Pelli has defaulted on a contract they signed in 2016 which would see his company NB2 Farming supplying them 2000 skins per year until 2025.
In the documents obtained by the Cairns Post, Mr Jueregen said NB2 had previously supplied to luxury brand Hermes.
But he said Italven inexplicably increased their skin standards to "perfection" after the contract had been signed and questioned the quality of his skins despite pre-inspecting them.
He said they had originally asked for crocs with belly skin on average of 44cm wide, but then also changed their mind and downsized to between 35-39cm.
This was after he had purchased 1200 live crocodiles from the Northern Territory with "very good belly skin" in late 2016, of which more than half were already too big.
Mr Juergen claimed Italven co-owner Massimo De Luca told him, seven months after signing the contract, the "quality demands in the market for crocodile skins had changed and were rising" and he needed to "needed to bring the quality of crocodile skins up to meet that rising standard".
He said he told Mr De Luca he would need to keep the crocs in single pens for longer so they could grow out any scratches which would take longer to produce and cost more, which the Italian agreed to.
But despite NB2 making two deliveries of 290 skins in exchange for two payments of almost $340,000 in the first year, the deal began souring in 2017.
Mr Juergen claimed Mr De Luca and his brother Andrea came to the farm early that year and graded some skins to a much higher standard than their first inspection.
"I told Massimo and Andrea that the quality they were now demanding was really perfection and far exceeded the standard they had applied (initially)," he said, in an affidavit filed with the court.
"Massimo informed me that Italven could only be competitive in the market for saltwater crocodile skins by producing perfect quality for the market."
He said they called six months later demanding the smaller size skins, postponed several return visits to the farm, then at a meeting in Hong Kong in April last year, said they would not take any more of Melaleuca's crocs unless it complied with their increased standards.
"I was astounded and immediately said that the new requirement would necessitate a complete change in the production process and our existing stock of crocodiles would unlikely be unsaleable," he said, in his affidavit.
He said despite another phone call in July, he was sent a letter by KPMG in December to terminate the contract with Italven also claiming NB2 owed them about $952,000.
Mr Juergen has responded with his court action alleging, claiming $1.8 million in damages.
Italven is yet to file any documents.
The case is due to first appear before the Cairns court on June 21.