First court case reinforces law requires upfront prices for horticulture growers

22 December 2008

In the first case decided under the Horticulture Code of Conduct, the Federal Court in Darwin has declared that a horticulture merchant failed to comply with the code's pricing requirements in its dealings with two Northern Territory mango growers.

Grove and Edgar will write to all growers it trades with under the code informing them of its commitment to comply with the code and pay court costs of $7,500 to the Australian Competition and Consumer Commission.

Justice Reeves said: “It is important to note that the code has only been in effect for about 18 months and the promulgation of these orders in the manner proposed at this early stage of its operation will only serve to reinforce the need for agents and growers to familiarise themselves with its terms and ensure that they comply with it. 

"As well it will serve to inform agents and growers about one of the critical requirements of the code that was breached in this case i.e. the need to agree a price in writing prior to, or immediately upon, delivery of any produce.
ACCC Chairman, Mr Graeme Samuel, said the ACCC took the case to court to ensure that growers have certainty about the price they receive for their produce.

"Growers across Australia are vulnerable when they send their produce over long distances to capital cities.  Despatching perishable items over such a distance is fraught because it is very difficult to quickly resolve business and pricing disputes if they arise.  The code is designed to protect growers and to enable them to make informed choices about which merchant is able to provide them with the best deal."

In June 2008 the ACCC filed proceedings in the Federal Court in Darwin alleging Grove & Edgar had failed to agree in writing the price to be paid for the produce of some Northern Territory mango growers either before or immediately upon delivery of their mangoes during the 2007 season.

Following settlement discussions between the parties, Justice Reeves made the following orders by consent:

  • a declaration that Grove & Edgar had breached the Trade Practices Act 1974  by failing to comply with the Horticulture Code of Conduct requirement that it agree in writing the price to be paid for produce either before or immediately upon delivery with two NT mango growers
  • Grove & Edgar write to all growers it currently trades with under the Horticulture Code and any it commences to trade with in the next two years advising those growers that it would comply with the code, in particular its pricing requirements
  • Grove & Edgar pay the ACCC's costs in the agreed amount of $7,500.

"It is important that all horticulture produce merchants and agents recognise and abide by their obligations under the code," Mr Samuel said.

"The code was introduced as a mandatory code to ensure greater clarity and commercial transparency in transactions between growers and wholesale traders by clarifying the responsibilities and obligations of each.  An amount to be paid for produce must be provided to growers. It is not acceptable for merchants to provide a range of price to growers."

Since the code's introduction, the ACCC has conducted education initiatives within the industry for both traders and growers and distributed publications in several languages. The ACCC has also accepted court-enforceable undertakings from a number of traders in relation to conduct which has not complied with the code.

"The ACCC will continue to monitor the industry closely and will assess complaints it receives. Growers are encouraged to be aware of their rights under the code and seek compliance by the trader in the first instance," Mr Samuel said.

"However, growers should not hesitate to contact the ACCC if they consider traders are not complying with the code."

Media inquiries: Ms Lin Enright 02 6243 1108 or 0414 613 520
Infocentre: 1300 302 502

Release number: 
MR 371/08
ACCC Infocentre: 

Use this form to make a general enquiry.