FMA Welcomes new Code

Wholesalers heard in drafting of new Horticulture Code

Australia’s fresh produce wholesaling sector’s representative organisation, Fresh Markets Australia (FMA) has seen months of negotiation come to fruition this week with the Federal Government’s release of a new mandatory Horticulture Code of Conduct.

The new Code will take effect from 1 April 2017 and replaces the decade-old anticompetitive and inflexible existing regulation that saw wholesalers and growers wrestling with overly prescriptive and irrelevant Government red tape.

FMA Chairman, Shane Schnitzler, has thanked the Federal Government for listening and painstakingly working through the intricacies to draft more commercial and workable regulations.

“The process has been relatively harmonious and with far greater political interest and support than experienced with the introduction of the existing Code 10 years ago, with FMA’s voice largely heard and reflected in the drafting of the regulation,” Mr Schnitzler said.

“The new Code will offer increased flexibility and a reduction in the prescriptive clauses which contributed to making the existing Code unworkable.”

“The outcome recognises that with over 12 million transactions annually, Central Market wholesalers do generally have good working relationships with their growers.”

“It will, however, impose new requirements on wholesalers (traders) and growers including ongoing oversight by the Australian Competition and Consumer Commission (ACCC) and the introduction of monetary penalties for breaches.”

Mr Schnitzler said that in an industry comprised predominantly of small business, it was concerning that maximum penalties to growers and traders of up to $54,000 per breach could apply, which could result in financial hardship for growers and traders alike.

“The penalties have been set using other Industry Codes as a benchmark that were designed to address issues with multinational and large corporate operations and not small business,” Mr Schnitzler said.

“The ACCC must commit to only applying the penalty measures in circumstances when there have been blatant and ongoing breaches of the Code or we could find our growers and the majority of wholesalers left hurting over simple misdemeanours,” he said.

FMA has welcomed a new rule for written Horticulture Produce Agreements that allows them to be accepted by email and fax along with more flexible trading terms.

“FMA sees that educating the industry will be key to the success of the new Code and will certainly be working with its 400 in Australia in Australia’s six Central Markets to encourage compliance,” Mr Schnitzler said.

“In the past, the full onus has been on the wholesalers to advise their growers on their regulatory obligations with the ACCC monitoring only the wholesaling sector for breaches if any of its 15,000 growers who supply fresh produce did not comply with the mandatory paperwork.

“This Code places the responsibility on everyone to abide by the law, making it a much more even playing field for the whole industry in which to operate.”

It is still both unfair and anticompetitive that other supply chains in the fresh produce industry, such as retailers purchasing direct off growers, are not subject to any similar mandatory regulatory requirements or monetary penalties. It is also very disappointing that the Code has only been released by the Government three working days before it becomes effective, and that the transitional provisions will not adequately provide for the uptake of the new Code.

– ENDS –

For further information, please contact:
Andrew Young, Executive Director, on 07 3915 4200 or 0438 388 411
[email protected]
FMA is the national industry body representing wholesalers and supporting businesses in Australia’s six central
wholesale fruit and vegetable markets.

Note: The Horticulture Code was established in 2007 to regulate trade in horticulture produce between growers
and traders of fresh fruit and vegetables and to provide an alternative dispute resolution procedure. The
Horticulture Code is a prescribed, mandatory industry code under the Competition and Consumer Act 2010. The
code came into operation with the aim of improving the clarity and transparency in transactions between
horticulture growers and traders and to provide some standard procedures and mandatory requirements in the
trading relationship.

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