News & Insights

Following the shift from ‘education’ to ‘enforcement’ in 2023, the Horticulture Unit of the Australian Competition and Consumer Commission (ACCC) continues in 2024 with its focus on business compliance with the Horticulture Code of Conduct (Code).

Hot on the heels of the action taken against Nutrano, GetFresh Merchants Pty Ltd (GetFresh) became the 4^th fruit and vegetable trader of 2023 to pay a hefty price for allegedly breaching the Code. The ACCC issued several penalty notices to the Perth-based supplier for a total of $43,150.

More recently, in February 2024, APMS NQ Pty Ltd trading as the Total Food Network Australia (Total Food Network) paid two infringement notices totalling $27,500, for similar alleged contraventions.

What is the Code?

The Code is a mandatory industry code created under the Competition and Consumer Act 2010 (Cth).

Some of the critical requirements of the Code are that:

• horticulture produce must be sold under a compliant horticulture produce agreement (HPA); and
• traders of horticulture produce must publish their terms of trade and provide growers with statements for the sale of their produce.

Why did GetFresh receive penalty notices?

GetFresh is a supplier of unprocessed horticulture produce to the hospitality industry and it sources some of its produce directly from fruit and vegetable growers. GetFresh received the infringement notices for allegedly failing to have HPAs in place while trading with growers, along with failing to publish its terms of trade, as required by the Code.

ACCC Deputy Chair Mick Keogh stated, in relation to the GetFresh penalties, that “the [Code] exists to bring certainty and transparency to transactions between fruit and vegetable growers and traders, and the Code’s most fundamental requirement is that trading needs to occur under contracts called horticulture agreements”.

Why did Total Food Network receive penalty notices?

Following its annual compliance checks of the Code, the ACCC more recently investigated Total Food Network for allegedly not publishing its terms of trade, and allegedly trading in horticulture produce without an HPA.

ACCC Deputy Chair Mick Keogh stated, in relation to the Total Food Network penalties, that “This [HPA] is a central requirement that must be in place before a grower and trader can start trading, as it sets out the key terms and conditions, including action the grower can take if there is a dispute.”

What does this all mean for Agri Businesses?

The increased focus on enforcement of the Code as a result of recent audits serves as a clear message that compliance with the Code is non-negotiable. Whilst the ACCC’s audit of the horticulture industry revealed that the majority of fruit and vegetable wholesalers were compliant with the Code, there were several that were incorrectly reporting their prices and failing to make their terms of trade publicly available as the bare minimum requirement.

 How can Macpherson Kelley assist?

 Our experts can assist with:

• Implementing a regulatory compliance program in your business that aligns with the Horticulture Code and other mandatory standards where relevant; and
• Reviewing your businesses agreements and recommending revisions.

For further assistance, please contact one of our experts.

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.