First financial penalty under 2017 Horticulture Code

A Sydney fruit and vegetable wholesaler is the first business to pay a $10,500 infringement notice for an alleged breach of the Horticulture Code, which was updated in 2017 to include penalties for non-compliance.

Stuart Dickson Produce Pty Ltd (Stuart Dickson) was issued with the infringement notice for allegedly trading with a grower in horticulture produce without having a written horticulture produce agreement (HPA) in place.

Stuart Dickson’s alleged non-compliance with the 2017 Horticulture Code came to light following a compliance check the ACCC conducted with 15 fruit and vegetable wholesalers which revealed Stuart Dickson did not have a HPA in place with a significant number of growers.

“A Wholesaler trading with growers without written HPAs increases growers’ commercial risks, as they do not have certainty regarding critical terms of trade, such as how their produce will be graded, the price they will get paid and when they will get paid,” ACCC Deputy Chair Mick Keogh said.

“Horticulture wholesalers have been required since 2006 to have written agreements in place with growers under the mandatory industry code, and they should be careful to ensure they understand their obligations under the Code. There is no good excuse for not having written agreements in place when this has been a requirement since 2006.”

The 2017 Horticulture Code applies to all growers and wholesalers trading in horticulture produce (i.e. fruit, vegetables, herbs and nuts) and replaced a previous code. A key requirement of both the current and preceding codes is that horticulture wholesalers trade with written HPAs in place.

Prior to the 2017 Horticulture Code coming into full force on 1 April 2018, the ACCC worked with industry bodies to conduct education and awareness around the new Code’s requirements, including the fact that infringement notices could be issued.

“Now that the compliance and education stage is complete, the ACCC will not hesitate to take enforcement action for breaches of the Code, including taking court action to seek penalties in the future,” Mr Keogh said.

“We are continuing to consider a number of matters involving potential breaches of the 2017 Horticulture Code.”

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the 2017 Horticulture Code. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened the 2017 Horticulture Code.

The ACCC’s 2018 enforcement and compliance policy sees ensuring small business receive the protections of industry codes as an enforcement priority. It also refers to consumer issues in the agriculture sector, with specific reference to enforcement of the 2017 Horticulture Code.

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