Code Contention 

This week, the Federal Government appointed Horticulture Code Committee will again meet to discuss the implications of adopting the ACCC’s 13 recommended amendments to the Horticulture Code of Conduct and review the submissions received from industry regarding same.

In responding to the call for submissions in January this year, Growcom distributed a survey to growers so as to gain their feedback given Growcom’s stated positions. It appears that the survey attracted fewer than 60 responses – and yet still served to highlight the divergence of opinion that exists regarding a number of the ACCC’s recommendations.

Growcom has continued to argue against a merchant style transaction whereby the return price paid to the grower is based on the sales price for the product achieved by the wholesaler less an agreed and documented margin. This position however, goes against the strong views of growers in each of two Roy Morgan Research surveys.

The last involved responses from over 600 growers, with 67% supporting amendments being made to the Code to include the sales price less a margin option. At the same time, Growcom has argued that the Code need only apply to wholesalers – they have not supported the approach of a simple commercial Code applying across the industry.

This is again out of touch with the views of growers, who in the Roy Morgan Survey, strongly supported a Code applying across all sectors of the industry. The March edition of Fruit & Vegetable News highlighted that Growcom now wants more consultation, and to re-open the review process that has occurred over the past 12 months.

The situation with the Code is now bordering on the ridiculous. The wholesaling sector has continued to express support for amendments that will make the Code cost effective, fair and workable, while a significant percentage of individual growers have also expressed support for a more flexible and cost effective code.

The Centre for International Economics, in its initial response to the prior Federal Government, highlighted numerous causes for concern with the current Code prior to its introduction, while the ACCC through its own recommendations has attempted to move some way down the path of introducing a fairer and workable Code.

Despite all this, it appears there are a number of peak grower organisations which still cannot accept the mood for change, the need for more flexible options, or the fact that many growers and wholesalers have an excellent working relationship. This organisation does not support the call for ongoing consultation and review being promoted by Growcom.

The Code should be amended to extend its application across the industry, to establish a broad base of commercial principles (e.g. method of trading, payment terms etc), require the use of documented terms of trade and facilitate the establishment of a disputes resolution mechanism. At the same time, the overly prescriptive, anti-competitive and inflexible provisions contained in the existing Code must be removed. After more than five years of debate, it must surely be the time for the Federal Government to put this issue to bed.