Seednet to pay $1m penalty for misleading barley performance claims

The Federal Court has ordered Landmark Operations Limited (trading as Seednet) to pay a $1 million penalty for making false, misleading and deceptive claims in a fact sheet for its barley variety known as ‘Compass’.

From at least December 2014 to December 2016, Seednet told farmers that Compass barley had strong straw and better straw strength and lodging resistance (ability to remain upright), than an older variety of barley known as ‘Commander’, when that was not the case. Seednet also misled farmers into thinking ‘Compass’ was better suited to early sowing, higher fertility paddocks and higher nitrogen rates than ‘Commander’.

“Seednet’s conduct was unacceptable because it misled farmers into sowing barley crops under a false impression about the qualities of the crops they were planting,” ACCC Deputy Chair Mick Keogh said.

“As a result of Seednet’s conduct, farmers were denied the chance to make a fully informed decision on what would be the best barley variety for their farms.”

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In addition, Seednet represented from at least January 2016 through to December 2016 that ‘Compass’ had higher resistance to a disease known as leaf rust than it actually did.

Seednet admitted it made the lodging and leaf rust claims through factsheets distributed nationally, despite the fact that Seednet was, or ought to have been, aware that Compass’ performance did not support the lodging representations, and that the leaf rust representations understated Compass’ susceptibility to leaf rust.

“Exaggerated marketing of new agricultural produce is a major concern across the industry,” Mr Keogh said.

“At the time of the release of a new crop variety, farmers and their agronomists lack other sources of independent information beyond what businesses tell them.”

“Seed companies, and agribusinesses more generally, are warned that they must have a proper basis for marketing the qualities of new agricultural varieties and must not misrepresent the properties or performance of new products.”

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The Court also ordered Seednet pay $50,000 as a contribution to the ACCC’s legal costs.

Background:

The ACCC instituted proceedings against Seednet in August 2018.

Landmark is one of Australia’s largest agribusiness companies and supplies a range of products including fertiliser, seed, farm services, wool, livestock and financial services. Seednet is Landmark’s Australian seed marketing business.

“Lodging” is a term used to describe the tendency for some cereal crops with weaker stems to fall over as they mature and ripen. Crops that experience severe lodging can be difficult or impossible to harvest, resulting in reduced yields and increased harvesting costs.

“Leaf rust” is a plant fungus that can severely affect barley crops, particularly where a crop is left untreated. It can result in reduced yields and, in regions where crops are very susceptible to the disease, it has the potential to spread to neighbouring farms.