Horticulture Code of Conduct: Trader and Grower Obligations Explained

Scope and when the Code applies

The Horticulture Code of Conduct is a mandatory industry code prescribed under the Competition and Consumer Act 2010. It replaced the 2006 Code and commenced on 1 April 2017. The code’s purpose is to promote fair dealing and commercial integrity in horticulture.

The code’s scope covers trade in unprocessed fruit, vegetables, nuts, herbs and spices. This includes transactions between growers and traders. For the purposes of the code, traders encompass both agents (who sell on behalf of growers) and merchants (who buy from growers to resell).

All trade in horticultural produce between covered parties must be conducted under a written horticulture produce agreement (HPA). This agreement must be in place before any trading commences.

Trader obligations under the Code

The Horticulture Code of Conduct outlines specific obligations for traders involved in horticulture produce agreements. A key requirement is transparency; traders must publish their terms of trade and ensure these are accessible to the public, for example, via a website. Each horticulture produce agreement must also clearly state the quality specifications for the produce being traded.

Traders have a responsibility to communicate effectively with growers. If horticultural produce is rejected, the trader must notify the grower within 24 hours and provide a clear explanation for the rejection. Payment to the grower must be made within the timeframe stipulated in the horticulture produce agreement.

Furthermore, traders are obligated to maintain accurate records relating to their dealings with growers for a minimum period of six years. Throughout the entire agreement, traders must also deal with growers in good faith.

Grower obligations and rights

Growers participating in the horticulture industry have specific obligations under the Code of Conduct. A core requirement is that growers must act in good faith when interacting with traders. This principle applies to all dealings and interactions throughout the trading relationship.

Growers are also required to maintain comprehensive records related to each horticulture produce agreement. These records must be retained for a period of six years. The ACCC may request access to these records during a compliance check to ensure adherence to the Code.

The Code also outlines rights for growers. Growers have the right to request that traders provide a written agreement before any trading commences. Furthermore, growers can utilise the Code's dispute resolution process, which includes mediation, to address and resolve any disagreements that may arise with traders.

ACCC enforcement and penalties

The Australian Competition and Consumer Commission (ACCC) regulates the Horticulture Code of Conduct and actively monitors compliance. The ACCC conducts targeted compliance checks each season to ensure adherence to the Code’s requirements. Breaches of the Code can result in significant consequences, including civil penalties imposed by courts and infringement notices issued by the ACCC.

Penalty levels are determined by penalty units as defined under the Crimes Act 1914, meaning they are subject to periodic adjustment. The ACCC’s enforcement actions frequently focus on areas such as failure to provide required records, trading without a Horticulture Property Authority (HPA) registration, and breaches of good faith obligations. These actions are taken when there is a failure to comply with obligations relating to ACL misleading and deceptive conduct.

To promote industry understanding and continuous improvement, the ACCC publishes annual compliance findings. These publications highlight areas of concern and provide insights into enforcement activities, aiming to encourage proactive compliance across the horticulture sector.