The Horticulture Code Committee is seeking submissions from
affected industry sectors (including processors, exporters and
retailers) in respect of recommendations made by ACCC to amend and
improve the Code.
The Horticulture Code of Conduct (Code) came
into effect on 14 May 2007. For further information see our Focus
Paper "Trade Practices (Horticulture Code of Conduct)
Regulation 2006" dated 10 May 2007. The Code is mandatory
and was introduced to regulate trade between growers and
wholesalers of fresh horticulture produce. The Code applies to
wholesalers who trade as agents and also those who trade as
merchants. Currently, the Code does not apply to trade between
growers and processors, growers and exporters or growers and
The Australian Competition and Consumer Commission
(ACCC) recently made 13 recommendations
(Recommendations) to improve the Code, including
extending the Code to apply to trade between growers and
processors, growers and exporters, and growers and retailers.
The Recommendations are as follows:
Recommendation 1: Amend the Trade Practices Act to introduce
civil pecuniary penalties and infringement notices in relation to
Part IVB provisions, such as the Code and introduce random record
audits as an enforcement mechanism available under the
Recommendation 2: Amend the Code to regulate first point of
sale transactions of horticulture produce between a grower and a
retailer, exporter or processor.
Recommendation 3: Amend the Code to regulate first point of
sale transactions between a grower and a trader in horticulture
produce, including in relation to agreements made before 15
Recommendation 4: Amend the Code to require a merchant to
provide a grower, before delivery, with either a price or a formula
for calculating price. Any agreed method used to calculate price
must be by reference to the amount received by the merchant from
the sale of the produce to a third-party purchaser.
Recommendation 5: Amend the Code to require that if a
merchant does not reject the produce within 24 hours of physical
delivery, the produce is deemed to be accepted.
Recommendation 6: Amend the Code to enable a merchant to
deduct the cost of any services that are required to prepare the
produce for resale as part of the price amount or as part of the
method for calculating the price amount.
Recommendation 7: Amend the Code to only permit an agent to
recover their commission for services performed under an agency
agreement as a deduction from amounts paid by a thirdparty
Recommendation 8: Amend the Code to exclude persons who may
be an agent's competitor from inspecting that agent's
records on a grower's behalf.
Recommendation 9: Amend the Code to ensure that transactions
between a grower and a cooperative/packing house, in which that
grower has a significant interest, are exempt from regulation under
Recommendation 10: Amend the Code to permit agents and
growers to engage in pooling and price averaging.
Recommendation 11: Amend the Code to exempt transactions
entered into in a grower shed at the central markets from
regulation under the Code, while permitting parties to these
transactions to access the Code's dispute resolution
Recommendation 12: The ACCC also recommends that the costs
incurred by the parties to a dispute under the Code dispute
resolution procedure be subsidised by the Australian Government to
the same extent as the voluntary Produce and Grocery Industry Code
of Conduct (PGICC).
Recommendation 13: The ACCC also recommends the
implementation of further education initiatives regarding the Code
and its dispute resolution procedures, including the role of
assessors in resolving disputes.1
The Horticulture Code Committee (Committee) was recently
re-established to assist the Federal Government in considering and
responding to the Recommendations. The Committee comprises an
independent Chair and representatives of growers, processors,
packagers, retailers, exporters, wholesalers and market owners.
The Committee met on 1 and 2 December 2008 to consider the
Recommendations and will meet again in early March 2009 to consider
the Recommendations further. Selected industry members will be
invited to that meeting to discuss any submissions they may wish to
make in respect of the Recommendations.
The Committee is currently seeking from affected industry
sectors written submissions that:
respond to the Committee's deliberations to date; and
outline other implications that the Recommendations have on
affected industry sectors.
Submissions should be received by the Committee by 6 February
2009 and should address the implications of implementing the
Recommendations and not the merits of the Recommendations
1. Source of information: Horticulture Code
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