Stalemate on HPA code

Earlier this week the Australian Competition and Consumer Commission (ACCC) issued a media release issuing a warning to fruit and vegetable growers of the commercial risks that they face in trading produce without a Horticulture Produce Agreement in place in accordance with the Mandatory Horticulture Code of Conduct.

The media release went on to quote ACCC Chairman Graeme Samuel, in stating that "Horticulture Produce Agreements are designed to give both growers and merchants greater certainty in their dealings with each other".

The benefit of having documented terms of trade is obvious, and has never been in dispute. This is good commercial practice and obviously promotes clarity and transparency.

The issue with the existing Code has always been the prescriptive nature of certain parts of its content which makes it unworkable for a very significant percentage of the industry.

Given the current review of the Code, the wholesaling sector is seeking to achieve a compromise and has issued its response to the ACCC's 13 key recommended amendments to the Code, while also seeking further amendments in two key areas.

The wholesaling sector is seeking changes that allow for recognition of the fact that certain growers and traders may want to negotiate terms that give them flexibility to suit the manner in which they trade, while still complying with certain core elements of the Code.

The wholesaling sector wants the Code to provide for a range of core requirements that promote contractual clarity and good commercial practices, without prescribing the detail which should be left to the terms of trade document.

These core requirements to be covered in terms of trade documents should include:

• payment terms
• method of operation ·
• return price
• transfer of title and risks
• dispute resolution
• processes to apply
• rejection and/or return arrangements
• product descriptions/standards

The stalemate regarding the Code has now existed for over three years. It would appear that an outcome which best serves the interests of the broader industry is more likely to occur when there is industry agreement to having a Code that serves to promote better commercial practices, without compromising the many effective commercial relationships which exist between growers and traders, or reducing the flexibility that enables them to effectively do business.