Horticulture Code review announced but industry transparency still a concern, potential for extension to retailers

Posted by AFN Staff Writers on 4th June 2015
The government this week announced a review of the Horticulture Code of Conduct.
The government this week announced a review of the Horticulture Code of Conduct.

The government this week announced a review of the Horticulture Code of Conduct.

Established in 2007, the Code was intended to enforce transparency between wholesalers or distributors of fruits and vegetables in their contractual dealings with growers.

There have been complaints by growers about the Code and its enforcement. Many of the issues were raised in the recent Agricultural Competitiveness White Paper commissioned by the Australian Government.

The review may consider whether the Code should extend to supermarkets and large green grocers and other retail agents.

Since its implementation, there has only been one conviction which occurred in 2008.

The Code which is enforced by the Australian Competition and Consumer Commission (ACCC) will be independently reviewed by Mr Mark Napper and Mr Allen Wein. Mr Napper is an accountant and horticulturalist and Mr Wein previously reviewed the Franchising Code applicable to all franchised arrangements in Australia.

The anticipated date of release for a report by the reviewers by the Code is the end of 2015.

Support from industry grower groups

The review has been supported by a number of grower groups including Growcom, the body representing Queensland growers of fruit and vegetables.

“The timing is appropriate in line with the recent Competition Policy Review and the introduction of the supermarket Code,” Rachel Mackenzie, Chief Advocate for Growcom said. She was referring to the Supermarket Code of Conduct.

Horticultural industry body, Ausveg, also came out in support of the review.

“This review will ensure that the Code will remain relevant to the current needs of the industry, and that all areas of Australian horticulture can be properly protected,” said Ausveg CEO Richard Mulcahy.

The case of the one and only conviction under the Horticulture Code

In 2008, horticultural buying company Grove and Edgar was found guilty of unfairly dealing with two Northern Territory mango growers. The company had mangoes delivered to it only to then offer to buy them at an unfair lower price than initially indicated. The growers faced a situation of having to then pay for the return of the mangoes, have them wasted or to accept the lower price.

Grove and Edgar were made to pay the ACCC’s court costs of $7500 and the company to communicate to their suppliers that they would now be complying with the Code.