Western Australian horticulture wholesaler Galati has paid $62,600 in penalties after the ACCC issued it with four infringement notices for alleged contraventions of the Horticulture Code.
The ACCC alleges that Galati breached the Code by trading with at least four growers without a horticulture produce agreement in place.
“A horticulture produce agreement must be in place before a grower and trader can start trading, as it sets out the key terms and conditions of their commercial relationship,” ACCC Commissioner Mick Keogh said.
The ACCC also alleges that Galati provided statements to growers which did not specify the quality of some produce as required by the Code.
“When traders haven’t put in place a written agreement that sets out the terms, quality parameters and what happens in the event of a dispute, growers are left without access to the full protections provided by the Code,” Mr Keogh said.
Galati also provided a court-enforceable undertaking which has been accepted by the ACCC, to implement a compliance program, and to ensure they have a signed agreement with, or written notice of acceptance of the terms of an agreement from, each of its growers.
“It is important that industry codes of conduct in agriculture are enforced to protect the many small businesses operating in that sector,” Mr Keogh said.
The ACCC shifted from focusing on education and compliance activities to focusing on greater enforcement of the Code when the ACCC updated its guidance of the Horticulture Code in August 2022.
“We will continue to monitor traders’ compliance with their obligations under the Code and take appropriate enforcement action when necessary,” Mr Keogh said.
The ACCC will conduct further industry education activities and provide traders with easy to understand guidance on the Code.
Background
Galati, a large horticulture wholesaler trading as Summer Fruit Sales and Cream of the Crop Produce, purchases directly from growers and traders. The broader Galati Group comprises several companies and is best known for its Spudshed grocery retail chain, which operates 17 stores across Western Australia.
The Horticulture Code is a mandatory industry code prescribed under the Competition and Consumer Act (CCA). It is an integral requirement of the Code that agents and merchants operating in the horticulture sector must have a Horticulture Produce Agreement confirmed with each grower they deal with, that complies with the requirements of the Code.
The ACCC’s enforcement options include administrative resolutions, court-enforceable undertakings, infringement notices and, for certain breaches, commencing civil penalty proceedings.
Galati is the sixth trader to have paid a penalty for alleged breaches of the Horticulture Code since June 2023.
In February 2024, the Total Food Network (Australia) paid $27,000 in penalties after the ACCC issued it with two infringement notices for alleged contraventions of the Horticulture Code.
In December 2023, Getfresh Merchants Pty Ltd paid penalties totalling $43,150 after being issued with three infringement notices by the ACCC, one for an alleged failure to publish and make publicly available their terms of trade and two infringement notices for two instances of allegedly trading without an HPA.
In October 2023, Nutrano paid penalties totalling $24,850 after the ACCC issued it with two infringement notices, one for an allegedly non-compliant HPA and one for allegedly not reporting sales price (acting as an agent). The ACCC also accepted a court-enforceable undertaking, in which Nutrano committed to provide growers with updated statements for the 2022 season, stating the price Nutrano received for the grower’s produce.
In July 2023, Bache Bros paid a penalty of $13,750 after the ACCC issued it with one infringement notice in relation to an alleged failure to make its terms of trade publicly available.
In June, 2023, Green Endeavour paid a penalty of $13,750 after the ACCC issued it with one infringement notice in relation to an alleged failure to publish and make its terms of trade publicly available.
Note to editors
The payment of a penalty specified in an infringement notice is not an admission of a contravention of a mandatory industry code or the Australian Consumer Law (included at Schedule 2 to the CCA).
The ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business has contravened certain provisions in industry codes.