ACCC takes action against Seednet over barley performance claims

6 August 2018

The ACCC has instituted proceedings in the Federal Court against Landmark Operations Limited (trading as Seednet) for allegedly making false, misleading and deceptive claims in a fact sheet for its barley variety known as ‘Compass’.

At the time of the alleged conduct, ‘Compass’ was a new barley variety that was developed by the University of Adelaide. Seednet markets and distributes Compass to retailers and farmers across Australia under a licencing agreement with the University of Adelaide. ‘Commander’ is an older variety of barley commonly grown by farmers, developed by the University of Adelaide and also marketed and distributed under license by Seednet.

The ACCC alleges that, from at least December 2014 to December 2016, Seednet misrepresented to farmers that Compass barley had strong straw; had better straw strength than Commander; had improved lodging resistance than Commander; and was better suited to early sowing, higher fertility paddocks and higher nitrogen rates than Commander.

By at least December 2014, Seednet had received information which made it (or ought to have made it) aware that Compass’ performance did not support these representations.

The ACCC also alleges that, from at least January 2016 to December 2016, Seednet misrepresented to farmers that Compass had higher resistance to a disease known as ‘leaf rust’ than it actually did in NSW, Victoria, Queensland, SA and WA.

By January 2016, Compass had been rated very susceptible to leaf rust in NSW, Victoria and Queensland, and ranging up to very susceptible in SA under consensus ratings through the National Variety Trials program.

“We allege that Seednet knew, or ought to have known, that its representations in relation to Compass’ straw strength and leaf rust resistance were incorrect, but that it did not amend its fact sheet to correct these representations,” ACCC Deputy Chair Mick Keogh said.

Potentially misleading marketing of new varieties of agricultural produce is a key issue that has been raised with the ACCC by farmers.

“Farmers have told us they suffer harm as a result of misleading marketing because, without correct information, they assume or are incorrectly advised that other factors such as the weather are to blame when crops don’t succeed or perform in the way that has been represented by suppliers,” Mr Keogh said.

“The sad fact of the matter is farmers often don’t have the time or money to pursue seed companies when products fail or don’t work in the way they should.”

“Agribusinesses should be careful to ensure they have a proper basis for marketing the qualities of new agricultural varieties and that they do not misrepresent the properties or performance of new products. Any misrepresentations risk ACCC enforcement action,” Mr Keogh said.

Notes to editors:

Landmark is one of Australia’s largest agribusiness companies and supplies a range of products including fertiliser, seed, farm services, wool, livestock and financial services. Seednet is Landmark’s Australian seed marketing business.

Seednet envisaged that Compass would eventually replace Commander. Many grain varieties have a peak selling period, after which sales start to decline as newer varieties with improved performance characteristics come on to the market.

“Lodging” is a term used to describe the tendency for some cereal crops with weaker stems to fall over as they mature and ripen. Crops that experience severe lodging can be difficult or impossible to harvest, resulting in reduced yields and increased harvesting costs.

Competition and consumer issues in the agriculture sector are a current enforcement and compliance priority of the ACCC. The ACCC’s dedicated agriculture unit was set up in 2015. This matter came to the attention of the ACCC through the agriculture unit’s engagement work.

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