BREACHES of the Horticulture Code of Conduct have prompted the governing body to issue a warning to fresh produce wholesalers.
The Australian Competition and Consumer Commission (ACCC) says it will increase its focus on Horticulture Code of Conduct non-compliance reports after audits found incidents of wholesalers not meeting their legal obligations.
The ACCC conducted audits after hearing through its Perishable Agricultural Goods Inquiry that some fruit and vegetable wholesalers were trading without Horticulture Produce Agreements, which is a breach of the code.
In a statement, the ACCC said it believes the horticultural industry would benefit from further guidance and will release updated industry guidance in the coming months.
Following this, the ACCC intends to conduct further audits and will strongly consider enforcement action if it identifies non-compliance.
Horticulture Produce Agreements are written contracts that growers and wholesalers must have in place before trading with each other.
The ACCC's audits found most wholesalers were complying with the requirement to trade under a Horticulture Produce Agreement, but identified some incorrectly reporting prices in statements to growers, and failing to make terms of trade publicly available.
ACCC deputy chair Mick Keogh said under the Horticulture Code, which came into full effect in 2018, many wholesalers were required to report what price they paid growers for the produce and what price they on-sold it for.
"Having this information provides greater price transparency for growers and enhances competition in the market," Mr Keogh said.
"Without a compliant statement, a grower who sells their produce to a wholesaler may not be able to see what retailers pay for their fruit or vegetables."
Fresh Markets Australia (FMA) Is the national organisation representing each of the five market chambers, which themselves are organisations which represent the fruit and vegetable wholesalers located in each of Australia's six central markets (Brisbane, Sydney, Melbourne, Adelaide, Perth and Newcastle).
FMA chair Shane Schnitzler said the organisation's state industry bodies will be following up with their members as well as conducting further re-fresher training in relation to the requirements of the Horticulture Code over the coming two to three months.
"Given the disruption and distractions for business owners over the past few years, it is timely and appropriate to have some follow-up at this time," Mr Schnitzler said.
"No enforcement action has been taken by the ACCC against any of the traders who were subject to a random audit.
"The vast majority of wholesalers continue to have long standing relationships with growers marked by mutual trust and respect.
"It is sound business practice to have a Horticulture Produce Agreement in place and is a shared responsibility of the wholesaler and grower, providing clarity in the trading relationship."
The code's requirement for wholesalers to make terms of trade publicly available also provides growers with transparency on the trading conditions proposed, according to the ACCC.
"Growers are at a disadvantage if wholesalers don't publish their terms of trade, as they lose the ability to quickly and easily compare terms between wholesalers, which reduces transparency in the market," Mr Keogh said.
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