THE peak body for the Australian potato industry says court action taken against one of the largest growers in the country over alleged unfair contracts serves as a reminder to comply with the law.
Ausveg has acknowledged the Australian Competition and Consumer Commission's announcement yesterday that it will be instituting proceedings against South Australia-based The Mitolo Group over several terms in Mitolo’s standard form contracts with potato farmers which the ACCC alleges are unfair contract terms.
It will be the first case of court action being taken over an alleged breach of the Horticulture Code of Conduct, which came into full effect on April 1 this year.
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Ausveg chief executive officer, James Whiteside, said his organisation had recognised the ACCC’s actions.
“The Horticulture Code was introduced to improve clarity and transparency of trading arrangements between growers and traders in the horticulture sector,” Mr Whiteside said.
“As an industry, we stand by the Code and what it represents and support that all parties must abide by the law.
“We recognise the right that the ACCC has to enforce civil penalties and infringement notices on growers and traders.
“We will watch the proceedings with interest.”
In 2011, The Mitolo Group won the Innovative Marketing Award at the Ausveg Awards of Excellence for its certified low GI Carisma Potato, which are available exclusively through Coles supermarkets.
Last year, the Mitolo Group, backed by the Australian Industry Group, put a case to the Fair Work Commission to have the Horticulture Award extended to store workers who handle fresh produce outside the farm gate.
The ACCC alleges The Mitolo Group enters into exclusive supply contracts with potato farmers for a specified volume of fresh potatoes each season but does not determine the price it will pay until the potatoes are ready for harvest.
Yesterday, ACCC deputy chair, Mick Keogh, told Good Fruit & Vegetables it surprised him that such a high profile grower would fall foul of the new Horticulture Code.
"For a business of this scale you would think they would have proper arrangements in place," he said.
He said the aim of taking court action was to uphold the Horticulture Code of Conduct and that The Mitolo Group case was not necessarily being done to send a message.
"I would say that would be one of the benefits from the proceedings, depending on what the court decides," he said.
Ausveg's Mr Whiteside said the case serves as a timely reminder to industry that growers and traders must be complying with the law.