Australia’s consumer watchdog has taken the country’s largest potato wholesaler to court over alleged unfair treatment of farmers under the new Horticulture Code.
The Horticulture Code, which came into effect on April 1, 2018, is designed to enforce standards and transparency in the contracts signed between fruit and vegetable growers, and their agents and merchants.
Mitolo this week became the first business targeted under the Code, when the Australian Competition and Consumer Commission instituted proceedings alleging several breaches related to farmers’ rights.
The market watchdog is alleging Mitolo’s contracts with farmers generally do not specify an up-front price, allow Mitolo to declare potatoes as “wastage” without a proper review mechanism, and prohibit farmers from dealing with other agents or merchants.
The ACCC is seeking a formal declaration of these breaches, and wants penalties, injunctions and a compliance program put in place.
“This is the first court action the ACCC has taken under the newly introduced Horticulture Code and our first unfair contract terms action in the agriculture industry,” ACCC deputy chair Mick Keogh said on June 26.
“The issues in this case go to the heart of concerns about unfairness in the agriculture sector that led to the establishment of the ACCC’s dedicated Agriculture Unit, which is investigating agricultural supply chains and engaging with the sector.”
Keogh said Mitolo’s contract terms were “some of the most egregious terms we have seen in agricultural contracts”.
“We believe that these terms have caused, or could cause, significant detriment to farmers, by passing a heavy burden of risk down to farmers, the most vulnerable player in the supply chain.”