The Horticulture Code of Conduct is a mandatory industry code under Section 51AE of the Competition and Consumer Act 2010 and enforced by the Australian Competition and Consumer Commission. Growcom has always strongly supported the Code and its objectives of increased transparency in trading operations between wholesalers and growers of fresh fruit and vegetables.

The Federal Government launched a review of the Code in June last year after nine years of its operation. The government yesterday announced that it would consider the review’s thirteen recommendations.

Growcom Chief Advocate, Rachel Mackenzie, said it was encouraging that the reviewers recognised the ongoing need to ensure transparency between growers and wholesalers in the marketplace through a mandatory Code.

“We are particularly pleased that the reviewers have placed a strong emphasis on implementing a real time pricing mechanism in the market place. We urge the government not only to financially support such a mechanism but also to mandate its use,” she said. “The reviewers have done a comprehensive job in evaluating the concerns across the supply chain and whilst not all of our recommendations have been taken up we believe they have been given due consideration.”

“An important recommendation is the requirement that all transactions with the wholesale sector be subject to the Code, even those entered into before December 2006. The pre-Code contracts have been a significant factor in the ineffectiveness of the current Code.”

Mackenzie said a major departure from the current Code was the removal of the requirement for wholesalers to stipulate whether they are acting as merchants or agents.

“Historically, Growcom has been strongly opposed to any hybrid trading model, however, we are prepared to road test this recommendation with growers to determine if the proposed safeguards put forward by the reviewers for this proposal offer adequate protection.

“Some of the key safeguards include very clear transparency requirements within a Horticulture Produce Agreement, a real time pricing mechanism, significantly improved dispute resolution processes and improved enforcement by the ACCC, including on the spot fines.

“The reviewers have also recommended the inclusion of a good faith provision which is designed to protect parties from poor practice across the Board. Clearly, we would be unable to support the hybrid model if these safeguards were not also mandated.”

Growcom said that it will be consulting with its members over the next few weeks to ensure that the proposed recommendations are supported by growers before providing a response to government.

“Overall we support a robust 21st Century supply chain that delivers clear price signals to growers and would like to thank the reviewers for their thoroughness and commitment.”