News & Insights

A spotlight has been cast on growers, merchants and agents working in the horticulture sector following investigations and industry research by the Australian Competition & Consumer Commission (ACCC).

After carrying out audits into the fruit and vegetable wholesaler sector, the ACCC found that several businesses were not complying with the Horticulture Code of Conduct (Code).

The recent announcement made by the ACCC is as good a reminder as any to pump the brakes, review the regulation and ensure your business is compliant.

what is the horticulture code of conduct?

The Horticulture Code of Conduct is a mandatory industry code under the Competition and Consumer Act 2010 (Cth) that applies to horticulture growers and traders. While the Code has been in existence for a while, the ACCC has recently flagged that it believes the industry may require further guidance when it comes to compliance and isn’t afraid to issue fines to businesses when existing regulations are not being followed.

Currently, and relevant to those in the industry, the ACCC is in the process of conducting further investigations and audits as a priority and has flagged an increased focus on horticulture businesses compliance. But what risk does this hold for your business? And what fines can you expect if you are caught behind the eight-ball?

breaches of the Code

The ACCC found in its recent investigations that several businesses were trading without a Horticulture Produce Agreement, and/or failing to report prices. The ACCC considers that the latter in particular poses serious transparency issues for growers, as wholesalers are required by law to report on the price for which they will buy and sell produce.

Trading without a Horticulture Produce Agreement

The audit found that while most businesses were compliant, some still failed to have a Horticulture Produce Agreement in place prior to trading. The Horticulture Produce Agreement is a written contract between the grower and the trader that must be entered into before the commencement of their business relationship, and containing mandatory content.

Failing to report prices

Traders are obligated under the Code to report the price they pay a grower for their produce and what price they on sold it for. This includes preparing a report to the grower with the relevant sale information of the produce.

what are the penalties for non-compliance?

The cost of non-compliance often outweighs the risk, with the maximum penalty for both types of breaches being 300 penalty units, the equivalent of $66,600 AUD.

need assistance?

If you’re a business that trades or produces horticulture products, we recommend that you consider implementing practices that will support you to comply with the Code.

Alternatively, if you’re a horticulture business but do not have up-to-date policies and protocols that comply with the Code, we strongly recommend that you seek legal assistance for the drafting and reviewing of contractual documentation or advice on the horticultural obligations.

For assistance, please reach out to Kelly Dickson of our Intellectual Property and Trade team in Dandenong.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.