ACCC pivots to enforcement after grace period for the Horticulture Code

Bache Bros Pty Ltd, a fruit and vegetable wholesaler, has been issued an infringement notice by the ACCC for $13,750 following allegations that it failed to make a document setting out its terms of trade publicly available, as required by the Code.

Issue of the infringement notice to Bache Bros by the ACCC comes only weeks after Green Endeavour Pty Limited (t/as Suncoast Fresh and Fruit Link) was issued an infringement notice for the same alleged contravention.

The Horticulture Code came into full effect in 2018, however, the ACCC released updated guidance in 2022. Until recently, the ACCC had reportedly focused on educating market participants about the requirements under the Code. Issuance of the infringement notices (the payment of which is not an admission of contravention) demonstrates that the ACCC as the regulator of the Code is now turning to enforcing compliance with the Code.

The infringement notices issued to Endeavour and Bache Bros involved alleged breaches by these companies for failure to comply with the requirement under the Code requiring wholesalers to publish their terms of trade with growers on their websites. The requirement to publish terms of trade is intended to increase transparency in transactions, to enable growers to compare the different contract terms being offered by wholesalers and to provide a fair and equitable dispute resolution procedure.

Similar requirements to publish terms of trade apply across a number of mandatory codes made pursuant to the Competition and Consumer Act and have also been enforced by the ACCC under the Dairy Code of Conduct in proceedings commenced by the ACCC against milk processor, Lactalis Pty Ltd in 2022.

Compliance with the mandatory codes of conduct in the agricultural sector is a 2023 enforcement priority for the ACCC and the allegations against Endeavour and Bache Bros arose following compliance checks by the ACCC, which lead to further investigation.

The ACCC's recent investigations should sound a clear warning to wholesalers and suppliers bound by the Horticulture Code, particularly in respect of making their terms of trade publicly available in accordance with the requirements of the Code.

Market participants, however, should not assume that this is the sole focus of the ACCC's investigations in relation to compliance with the Code and they should promptly review the Code and the ACCC's guidance against their current market practices.