Australian horticulture industry under microscope in first independent code of conduct review in a decade

Australia’s $18.9 billion horticulture industry is set to go under the microscope, with the Federal Government launching the first independent review in 10 years of the Horticulture Code of Conduct. The code — established in 2007 — regulates trade between growers and traders of wholesale unprocessed fruit, vegetables, nuts and herbs, and was last officially reviewed in 2015. As well as serving the important function of preventing unfair dealing, the code provides an alternative dispute resolution procedure for growers and traders, allowing for the employment of an expert mediator. Chris Leptos AO, independent reviewer under the Food and Grocery Code, has been tasked with conducting the review that will examine potential improvements to the code and allow stakeholders to consider competition issues facing the sector. The code was thrust into the spotlight in 2024 when West Australian horticulture wholesaler Galati paid $62,600 in penalties after the Australian Competition and Consumer Commission issued it with four infringement notices for alleged contraventions of the code. The ACCC alleged that Galati breached the Code by trading with at least four growers without an agreement in place. In 2023, GetFresh Merchants, a fruit and vegetable supplier based in Perth, was fined $43,150 for various violations of the code, including failing to enter into a Horticulture Produce Agreement before trading and failing to publish its terms of trade. Stakeholders, such as traders, industry bodies and government agencies, are encouraged to consider the review’s consultation paper and respond with their suggestions about how to improve the code and its operation. Agriculture Minister Julie Collins urges growers and stakeholders across the supply chain to use the “important opportunity” to contribute and ensure improvement to transparency and accountability. Central wholesale markets will be key among the stakeholders that will be putting forward suggestions to the independent review. The markets are supplied by around 10,000 growers, and serviced by more than 400 fruit and vegetable wholesalers. Around four million tonnes of horticultural produce worth more than $8 billion is processed through the central wholesale markets each year. Perth Market — WA’s wholesale market — handles over 220,000 tonnes of produce annually through more than 25 wholesalers, and is governed by MarketWest, who are members of national body Fresh Markets Australia. MarketWest are working in conjunction with other State bodies on a collective submission to the ACCC and Mr Leptos, that will be provided by Fresh Markets Australia. FMA chief executive Brett Collins welcomed the appointment of Mr Leptos as independent reviewer of the code “The review comes at a time when the code is operating in a more complex and higher-cost trading environment than when it was first introduced,” he said. “It is important that the review carefully considers how the code is working in practice across fast-moving wholesale markets.” Mr Collins said FMA will contribute case studies, economic evidence and on-the-ground insights and support changes that are “practical, widely understood, adopted, and complied with” to the code’s review. Vegetables WA chief executive Peter Spackman said post-Covid factors and administration costs had directly impacted the cost of operations. “The cost of doing business has substantially increased since the last Code review, driven by post-COVID factors like higher costs for labour, fuel, raw materials — fertilisers, chemicals, nutrients — and regulatory compliance,” he said. “This includes the costs of administering the code itself, food safety, and other industry regulations, as well as indirect costs such as hiring extra labour for issues like the recent Q-fly scares.” Mr Spackman said he would like reviews of the code to be accompanied by extensive education on the code’s purpose and penalties. “Due to the vastness of WA — with growing regions from Albany to Kununurra — many growers and traders have long-established relationships based on good faith,” he said. “Disputes, often concerning price or payout, are frequently resolved without relying on the Code. “In the past, this has meant that growers have questioned the necessity of a formal agreement.” Mr Spackman said he the severity of penalties — which have previously reached up to $60,000 — could be potentially reduced, and instead addressed through further education. He said Vegetables WA will replicate the approach taken during the previous review, which involved running a national and local education program, including face-to-face classroom meetings and regular updates to members.