Growers and wholesale traders need to comply with the Horticulture Code when buying and selling horticulture produce.
The Horticulture Code is a mandatory industry code prescribed under the Competition and Consumer Act 2010. Growers and traders trading in horticulture produce must comply with the Horticulture Code.
Traders can be either:
- merchants – who purchase produce for the purpose of resale
- agents – who sell produce on behalf of growers for a commission or fee.
The Code does not apply to:
- nursery products – including trees, plants, seeds and flowers
- retailers – businesses buying produce for retail sale
- exporters – businesses buying the produce for export
- processors – businesses buying the produce for processing.
On 3 June 2015, The Minister for Agriculture and Minister for Small Business announced a review of the Horticulture Code. The review is being undertaken by Mr Mark Napper and Mr Alan Wein. More information on the review can be found on the Department of Agriculture website.
Growers and traders must enter into a signed and written horticulture produce agreement (HPA) that complies with the Horticulture Code before they can trade with each other. The Code sets out what needs to be included in the HPA.
A trader’s terms of trade are the standard terms that the trader proposes to trade with growers. These terms can then be changed to meet the needs of individual agreements with growers.
Traders must prepare, publish and make public a terms of trade document. The Horticulture Code contains information about what should be included in the terms of trade.
A trader does not need to accept the produce if no agreement is in place. However, both parties may agree to enter into a written horticulture produce agreement after the produce arrives.
If a shipment arrives without a prior agreement, it would simply be a matter of the trader contacting the grower and forming an agreement. The relevant details could be entered into a template agreement and after this document was signed by both parties and returned to the trader the transaction could begin.
An exception to this would be if an agreement was entered into before 15 December 2006. If this agreement continues, and no variation or extension of the agreement has taken place since 15 December 2006, the trader must deal with the produce under the terms of the pre-existing agreement.
Ownership of horticulture produce will pass from a grower to a trader at different times depending on whether the trader is acting as an agent or a merchant.
For agents, ownership stays with the grower until the agent sells the grower’s produce.
For merchants, ownership passes from the grower to the merchant when:
- the produce is delivered to the merchant—if the price has already been agreed beforehand, or
- the merchant and grower agree on a price (to take place immediately upon delivery)—if the price has not been agreed before delivery.
Growers and merchants must agree on a price for the horticulture produce in writing either before delivery or immediately upon delivery.
The Horticulture Mediation Adviser (HMA) can provide mediation services for parties to a dispute under the Horticulture Code.
The ACCC investigates alleged breaches of the Horticulture Code and can take enforcement action where appropriate. See Horticulture Code investigations for information on the investigation process and actions taken by the ACCC.
Horticulture Code Compliance manual
An overview of the Horticulture Code fact sheet
The guide to the Horticulture Code for growers and wholesale traders in the horticulture industry
Service agreements & complying with the Horticulture Code
Merchant's rights and responsibilities under the Horticulture Code
Can growers collectively bargain?
Agent's rights and responsibilities under the Horticulture Code
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