Representatives of some trader associations and individual traders may be attempting to circumvent the spirit and letter of the new mandatory Horticulture Code of Conduct, the Australian Competition and Consumer Commission has warned.
"The ACCC has received complaints regarding certain template horticulture produce agreements circulated widely that in the ACCC's view are not compliant with the horticulture code requirements," ACCC Chairman, Mr Graeme Samuel, said today. "Some templates include clauses that the ACCC considers may breach the horticulture code.
"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 the code of conduct and the Trade Practices Act 1974 if the contracts not comply fully with the code.
"The ACCC is investigating allegations some traders are insisting growers enter a non compliant horticulture produce agreement. Traders who induce growers into entering into such contracts also risk engaging in misleading or deceptive conduct if they wrongly give the impression to growers that they will not enjoy the benefits delivered by the code.
"Growers and traders should not use generic template agreements if they are non compliant with the horticulture 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.
"It is disappointing that some trader groups seem to be trying to undermine fundamental principles of the new code. We know that other traders have issued compliant agreements to their suppliers and are legally getting on with business under the new arrangements."
The ACCC regards any attempts to deliberately disregard the horticulture code very seriously and will continue to actively investigate the complaints that have been received. The ACCC will not hesitate to take enforcement action, if necessary through the Federal Court.
In the meantime the ACCC will also undertake further consultation with trader and grower representatives to seek to resolve shortcomings in some of the generic templates and to alleviate the confusion and uncertainty that has been engendered.
The ACCC encourages all growers and traders to only enter into Horticulture Produce agreements that are compliant with the Horticulture code.