The Gold Coast Bulletin

ACCC CHALLENGES ‘UNFAIR’ POTATO CONTRACTS

- DAVID SIGSTON

AUSTRALIA’S largest potato wholesaler, Mitolo, is facing legal action after being accused of entering into unfair contracts with its potato farmer suppliers.

The Australian Competitio­n and Consumer Commission (ACCC) yesterday said it had started Federal Court proceeding­s against the South Australian-based company - the first legal action taken under the recently introduced Horticultu­re Code. Mitolo, a major supplier to Woolworths and Coles, is facing allegation­s of unfair contract terms including signing exclusive supply contracts that allow it to vary prices unilateral­ly and prevent farmers from selling to other buyers. ACCC deputy chair Mick Keogh said Mitolo’s exclusive contracts also did not specificy how and when the price of potatoes would be determined. “These are some of the most egregious terms we have seen in agricultur­al contracts, and are key examples of the contractin­g practices in the sector that we want to address,” Mr Keogh said.

The consumer watchdog said the contracts were usually signed prior to, or during harvest, but would not determine the price until afterwards.

“We believe that these terms have caused, or could cause, significan­t detriment to farmers, by passing a heavy burden of risk down to farmers, the most vulnerable player in the supply chain,” Mr Keogh said.

The ACCC said they received complaints from farmers and industry associatio­ns. Mitolo is alleged to have breached the new Horticultu­re Code, which was introduced in 2017 and became mandatory from April 1.

The old industry code was reviewed after an ACCC investigat­ion into fair trading in the horticultu­re industry raised concerns, including that farmers were worried about retributio­n if they complained about retailers and wholesaler­s.

The new code introduced tougher penalties and increased requiremen­ts for clarity in industry contracts.

Mitolo has been contacted for comment.

 ?? Picture: MATHEW FARRELL ?? Potato farmers say a major supplier has been issuing unfair contracts.
Picture: MATHEW FARRELL Potato farmers say a major supplier has been issuing unfair contracts.

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