Rich Red Fruits amends ‘unfair’ contract terms flagged by ACCC

Australian fruit business Rich Red Fruits has amended its contracts with growers after the ACCC raised concerns over ‘unfair’ terms.

The terms flagged by the consumer authority meant that Rich Red Fruits could seek credit from a grower for produce that it had on-sold to a third party, but which was rejected by that third party.

The ACCC said the grower was required to provide credit for the amount the third party had contracted to pay Red Rich Fruits for the rejected produce, which was likely to include the trader’s profit margin.

The fruit trader also amended other contract terms in response to ACCC concerns about compliance with the Horticulture Code of Conduct, including pricing and payment clauses.

The horticulture produce agreement used in this case was prepared by a horticulture trader industry group, and distributed to its members for their own use.

As a result the ACCC is auditing traders’ compliance with the Horticulture Code of Conduct and examining whether other operators’ agreements contain similar terms.

“We are concerned that there may be more widespread non-compliance in this industry, and believe other traders may be using similar agreements in their dealings with growers,” ACCC deputy chair Mick Keogh said.

“Traders must check that their agreements do not contain unfair contract terms, and that they comply with the Code, which is mandatory for industry participants.”

The ACCC said it will take enforcement action where appropriate.

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