Groups exchange more blows over Hort Code

Groups exchange more blows over Hort Code


Horticulture
CLOCK TICKING: The federal government must make a move on the Horticulture Code of Conduct before it sunsets on April 1, 2017.

CLOCK TICKING: The federal government must make a move on the Horticulture Code of Conduct before it sunsets on April 1, 2017.

Aa

With the Horticulture Code of Conduct scheduled to "sunset" on April 1, 2017, time is ticking for the government to make changes to the code.

Aa

THE pressure is on the government to make a move over changes to the Horticulture Code of Conduct before the supply chain tears itself apart.  

The current code will "sunset" on April 1, 2017. A review of the widely criticised code was released in February this year.

That would have given the government a full year to consider the review's recommendations however the extensive federal election campaign put discussions on hiatus.

While the fresh produce industry awaits to see just what the federal department of agriculture will do with the Horticulture Code, representative groups are continuing to rip into each other over various elements.

Last week, Growcom and Bundaberg Fruit and Vegetable Growers Association (BFVG) used a meeting of disgruntled sweetpotato growers in Bundaberg who claim they are owed thousands by wholesale agents in Melbourne, to emphasise the need for the implementation of all 13 of the Hort Code recommendations. 

Thirty-five growers met with Australian Competition and Consumer Commission (ACCC) agriculture commissioner Mick Keogh.

Growcom’s chief advocate Rachel Mackenzie and BFVG managing director Bree Grima were present at the meeting and jointly called for stronger enforcement of the mandatory Horticulture Code and increased penalties for wrongdoing.

Some of the issues raised included: non-adherence by wholesalers to Horticulture Produce Agreements; long payment times of up to 90 days; wholesalers claiming to be merchants but acting as agents; and lack of transparency in business transactions.

“The growers indicated that there were some wholesalers who acted honourably but the issues seemed to be consistent and systemic," Ms Grima said.

“The growers all agreed that a stronger Horticulture Code with penalties and enforcement would improve accountability and would be a good starting point for a better system.

“Another suggested option was the implementation of a trust account system for agency transactions.”

Fresh produce wholesale representative body Fresh Markets Australia (FMA) was having none of it though, accusing Growcom of waging a campaign to "drive a wedge between producers and market wholesalers".

FMA's executive director Andrew Young said he contacted Mr Keogh to repudiate Growcom's allegations in the strongest terms.

“In an industry as large as horticulture there will be commercial disputes between parties from time to time, but Growcom’s claims that these issues are systemic are false and counter-productive to a collaborative, strong, profitable industry,” Mr Young said.

“The horticulture industry is actually noted for its extremely low level of commercial disputes.

“FMA and Government figures show that, over the past five years, the Horticulture Mediation Advisor managed just 12 mediations and the ACCC received just 35 complaints from growers.

"This is out of in excess of 60 million transactions conducted across the six central markets, over that five year period.

"We are talking about over 15,000 growers doing business with over 400 wholesalers in an industry with seasonal production, and fluctuating supply and demand.”

Mr Young encouraged growers who believe they have not been fairly treated to communicate promptly with their wholesaler, in the first instance, and submit a complaint to the relevant State Chamber of Fruit and Vegetable Wholesalers, which are all FMA members.

“If the matter remains unresolved, they should complain promptly to the Horticulture Mediation Advisor appointed under the Code," he said. 

"If that process fails, they can speak to the ACCC or pursue their own legal action.”

The Department of Agriculture and Water Resources confirmed the government was still considering the recommendations of the Horticulture Code's review ahead of making any decisions about its future.

"The department is unable to provide any comment on that process as government considers the recommendations," a department spokesperson said.

While the back-and-forth over the Horticulture Code continues, the ACCC has encouraged farmers to consider collective bargaining as a means of securing better trading conditions with customers.

ACCC deputy chair Michael Schaper recently launched a new guide for small businesses and farmers on the potential benefits.

Mr Schaper said a collective bargaining arrangement allows two or more competing businesses to jointly negotiate with a supplier or a customer over terms, conditions and prices.

“Working together, small businesses might be able to negotiate better terms and conditions with large businesses than they could achieve on their own,” Dr Schaper said.

“Many farmers have also taken advantage of collective bargaining agreements to negotiate collectively with processors to have greater input into the terms and conditions of their contracts.

“Potential benefits include sharing the time and cost of negotiating contracts, coordinating ordering and/or delivery, accessing new marketing opportunities from combining volume, and gaining better access to information."

There can also be benefits for the business the group negotiates with, such as reduced negotiation costs, more certainty of supply and savings from aligning transport and distribution.

He said it may be difficult to get some larger businesses to deal with a group, in which case a group could consider engaging in a collective boycott as a necessary negotiating tool.

“We recognise that in certain circumstances a collective boycott may be seen as necessary to achieve some of the efficiency benefits from collective bargaining. Each proposal is assessed on its merits,” Dr Schaper said.

“We encourage small businesses to get a copy of the guide and consider whether collective bargaining could suit their circumstances.

"The ACCC is able to talk to small businesses if they need more information about the options and the process for obtaining approval."

But he warned that without ACCC approval, businesses or individuals risk breaching the Competition and Consumer Act.

The Act generally requires businesses to act independently of their competitors when making decisions about pricing, which firms they do business with, and the terms and conditions of doing business.

Competitors who act collectively in these areas are at risk of breaching the competition provisions of the Act.

The ACCC can approve arrangements that might breach competition law where there is an offsetting public benefit.

Aa

From the front page

Sponsored by