Grape Co pays penalties for alleged misleading representations on grape origins and Horticulture Code breaches

Victorian table grape traders Grape Co Australia Pty Ltd and Grape Co Farms Pty Ltd (together Grape Co) have paid penalties totalling $34,920 after the ACCC issued three infringement notices alleging Grape Co made false or misleading representations about grape origins and failed to comply with the Horticulture Code of Conduct.

Grape Co Australia published on its website a claim that ‘Every single one of our grapes is personally hand-selected from the finest fruit on our family’s estate in Sunraysia Australia’, which the ACCC considered represented that all grapes are grown on the Grape Co Australia family estate, when in fact some Grape Co Australia branded grapes are grown on third party growers’ properties.

After investigating the matter, the ACCC issued one infringement notice to Grape Co Australia for allegedly making false and misleading representations on its website in relation to the origin of the grapes sold, in breach of the Australian Consumer Law.

“Food producers must ensure they do not mislead consumers with marketing statements about the place of origin of goods or produce. This not only impacts consumers, but can also prevent other businesses who are careful about being accurate in their marketing from competing on a level playing field,” ACCC Deputy Chair Mick Keogh said.

“Consumers looking to support small businesses may make purchasing decisions based on representations that the produce is sourced from a family farm, and it is important they are not misled so they get what they pay for.”

Grape Co Australia has since amended its website to reflect the true origins of grapes marketed to consumers.

Separately, Grape Co Farms paid $21,600 in penalties after the ACCC issued it with two infringement notices for alleged contraventions of the Horticulture Code.

The ACCC alleges Grape Co Farms traded without written Horticulture Produce Agreements when acting as an agent for grape growers, and failed to prepare, publish and make publicly available a document that set out its terms of trade.

“It is important that traders have written agreements with growers so that both parties clearly understand their rights and obligations and what can and can’t be done under the agreement,” Mr Keogh said.

“Terms of trade allow growers to understand the services and aspects of trading provided by different traders, so that growers can make an informed decision as to who they wish to supply produce to.”

In addition to paying these penalties, Grape Co Farms agreed to amend a number of terms in its standard form agreements considered by the ACCC to likely be unfair contract terms.

Some of the terms that have changed related to the ability for Grape Co Farms to unilaterally vary the agreement or unilaterally terminate the agreement with a short notice period, as well as Grape Co Farms’ ability to withhold part payments.

Background

Grape Co is located in the Sunraysia region in Victoria. Grape Co is a table grape trader that supplies grapes to domestic and international markets under the Grape Co label. Within Australia, Grape Co grapes are stocked in selected supermarkets.

Note

The Australian Consumer Law prohibits traders from making false or misleading representations concerning the place of origin of goods.

The Horticulture Code is a mandatory industry code under the Competition and Consumer Act, which sets out the minimum requirements for agents and traders in their dealings with fruit and vegetable growers. Enforcement of the Horticulture Code is a priority for the ACCC in 2021.

The Horticulture Code requires traders to prepare, publish and make publicly available their terms of trade. It prohibits growers and wholesalers from trading in horticulture produce without a written agreement that complies with the requirements of the Horticulture Code.

The ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business has contravened certain consumer protection provisions in the Australian Consumer Law, or has contravened a civil penalty provision of an industry code. The payment of a penalty specified in an infringement notice is not an admission of a contravention.

Example of alleged misleading place of origin on Grape Co website

Example of Grape Co misleading representation of origin on website

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