ACCC accepts court-enforceable undertakings from fruit trader

The Australian Competition and Consumer Commission has accepted court enforceable undertakings from Erceg Holdings Pty Ltd for breaches of the Horticulture Code of Conduct, a mandatory industry code under the Trade Practices Act 1974.

Erceg, a Western Australian merchant, traded with growers without having code compliant Horticultural Produce Agreements (contracts) in place with the growers. Erceg has acknowledged that its trading with the growers after 14 May 2007 contravened the Horticultural Code and section 51AD of the Act.

Erceg has also acknowledged that a Farm Produce Supply Agreement (contract) it offered to growers in October 2007 was not a code compliant contract.

Erceg cooperated with the ACCC and immediately took action to advise growers about its conduct, and introduce code compliant Terms of Trade and Horticultural Produce Agreements.

Erceg has given the ACCC s87B undertakings that it:

• will not trade in horticulture produce with growers who have not entered into a code compliant horticulture produce agreement with Erceg
• will offer growers code compliant Horticultural Produce Agreements (contracts)
• will make publicly available its terms of trade
• will have company officers or employees authorised to sign horticulture produce agreements on its behalf attend trade practices compliance training, and
• will confirm it has written to all growers to whom it has sent copies of the Farm Produce Supply Agreement informing them that:
  (i) the Farm Produce Supply Agreement did not meet the mandatory requirements of the code, and
  (ii) trading in horticulture produce without a compliant horticulture produce agreement (contract) in place is contrary to Regulation 6 of the code and a breach of the Act.

ACCC Chairman, Mr Graeme Samuel, reminded the industry that the code requires traders and growers to have written horticulture produce agreement before they trade in horticulture produce with each other.

"The ACCC regards any attempts to deliberately disregard the horticulture code very seriously and will not hesitate to take enforcement action, if necessary through the Federal Court."

Background

Horticulture Code

On 14 May 2007 the Horticulture Code came into effect as a prescribed industry code of conduct under the Trade Practices Act 1974.

The purpose of the code is to regulate trading in the horticulture produce industry. The code encourages greater clarity and commercial transparency in trade transactions between growers and wholesale traders by clarifying the responsibilities and obligations of each.

The code requires that all traders—whether trading as agents or merchants—prepare, publish and make publicly available a document that sets out the general terms and conditions under which they will trade with growers of horticulture produce. The code sets out the specific requirements for what must be included in the terms of trade document.

The code also requires that a trader and grower enter a horticulture produce agreement which must be in writing and signed before they trade in horticulture produce with each other. As an agreement between the parties the horticulture produce agreement can contain terms unique to the parties' situation. However, the code sets out the minimum requirements about what must be included in a horticulture produce agreement.

It is a breach of the code if growers and merchants trade in horticultural produce without a signed horticulture produce agreement in place.