Mitolo Group, the largest Australian potato wholesaler, has been fined for the supply contracts it concluded with the growers. According to the judge, the conditions are unfair and the grower is disadvantaged.
The Australian Competition and Consumer Commission, the watchdog that monitors fair trade practices, filed the lawsuit against the potato wholesaler. The judge judged that Mitolo Group has presented their growers with unfair contracts. The company must therefore pay a fine of $240.000 Australian dollars (€145.500).
Price was not fixed
This concerns 19 contracts that were concluded between 2016 and 2018. The conditions in these contracts do not comply with the code of conduct as drawn up in the sector. For example, it was not specified when the final price was determined, but the buyer could vary the price. Growers also received a discount for tare, without a good quality standard having been drawn up for this. In addition, growers were prevented from selling their potatoes to another party.
Finally, a provision was also declared null and void. At issue was the fact that the new growers had to enter into an exclusive agreement with Mitolo if they purchased land from an existing contract grower. This is the first time that a company has been tried for non-compliance with the agricultural code of conduct, which has been in force since April 1, 2018. Growers affiliated with the ACCC complained about the contracts. This is how the case got started in June last year.
The grower can choose the buyer himself
The company has now drawn up a new contract for the growers. This is more transparent, especially at the price level. In addition, growers are allowed to sell their potatoes to a third party if they cannot agree with the contract price offered.
Mitolo's potato growers have a combined area of 1.600 hectares in the states of South Australia and Western Victoria. The company has 2 factories with a daily processing capacity of 500 tons.