New Mandatory Horticulture Code

What’s new?

On 1 April 2017, we saw the introduction of the new Horticulture Code (Code) brought into effect by the Competition and Consumer (Industry Codes – Horticulture) Regulations 2017.

The new Industry Code:

  1. replaces the existing horticulture code established by the Trade Practices (Horticulture Code of Conduct) Regulations 2006 (2006 Code);
  2. sets out new mandatory requirements for growers and traders in the fresh fruit and vegetable markets; and
  3. introduces new penalties and audit powers for the Australian Competition and Consumer Commissioner (ACCC) providing greater power to the ACCC in enforcing the Code.

The Code’s purpose is to:

“(a) regulate trade in horticulture produce between growers and traders to ensure  transparency and clarity of transactions; and
(b) provide a fair and equitable dispute resolution procedure for disputes under the Code or under a horticulture produce agreement”.

The Code applies to growers and traders of horticulture produce which is unprocessed fruit, vegetables (including mushrooms), nuts, herbs and other edible plants and prohibits parties trading in horticulture produce without a written horticulture produce agreement (HPA). A HPA must be in writing and the Code sets out those matters parties must include in a HPA.

All parts of the Code apply with immediate effect to any:

  1. new HPA entered into on or after 1 April 2017; or
  2. existing HPA that is varied at any time after 1 April 2017.

For all existing HPA’s there is a transition period of 12 months from 1 April 2017, during which growers and traders have the ability to ensure they comply with the Code. However, some parts of the Code apply immediately.  Specifically, the dispute resolution provisions, record keeping requirements and general obligation on both growers and traders to act in good faith have immediate effect.

Applying to all HPA’s and with more stringent record keeping requirements for both growers and traders, financial penalties for non-compliance and the introduction of infringement notices, the Code seeks to address the shortcomings and loopholes identified in the 2006 Code and to improve commercial practices in the fresh fruit and vegetable markets.

For further advice or assistance in drafting a suitable HPA, traders terms or putting processes in place to ensure your business operates in compliance with the Code prior to 1 April 2018, please contact us.

This article was written by Eloise Preller, an Associate in our Sydney Commercial team.