Edition 45, June 2007

ACCC cautions against signing non compliant horticultural produce agreements

ACCC cautions against signing The Australian Competition and Consumer Commission (ACCC) has warned that representatives of some trader associations and individual traders may be attempting to circumvent the new mandatory Horticulture Code of Conduct.

The ACCC has received complaints regarding certain horticulture produce agreements that in the ACCC's view are not compliant with the horticulture code requirements.

For example, some clauses require a grower to agree to allow a trader acting as a merchant to unilaterally reject produce because of a change in market conditions after a merchant has taken delivery. Such a clause is likely to be unlawful under the code as in most circumstances ownership and market risk have passed to the merchant.

Other clauses require a grower to agree to a price under a merchant agreement that is well short of a commercially realistic price for the produce and promising the grower a possible bonus, dependant on the final price obtained by the merchant. This is likely to constitute a method of calculating a price and therefore raises concerns under the code.

Traders attempting to circumvent the code risk contravening both the code of conduct and the Trade Practices Act 1974 if the contracts do not fully comply.

Growers and traders should not sign agreements if they are non-compliant with the code. Any grower forced to sign such an agreement should contact the ACCC through the Infocentre on 1300 302 502. All complaints are treated confidentially.

In the meantime the ACCC will also undertake further consultation with trader and grower representatives to seek to resolve shortcomings in some of the agreements and to alleviate the confusion and uncertainty that has been engendered.

The ACCC encourages all growers and traders to only enter into compliant horticulture produce agreements.

For more information visit www.daff.gov.au/hortcode, call the ACCC Infocentre on 1300 302 502 or read the story in the March 2007 edition of Licensing Line News.

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