Australian Authority Takes Action against Unfair Potato Trading Practices

Work practices by potato and olive oil giant, The Mitolo Group, have come under scrutiny with the Australian Competition and Consumer Commission (ACCC) instituting proceedings against the company over standard form contracts with potato farmers.

The ACCC announced it has begun action against Mitolo Group Pty Ltd and a related entity (together, Mitolo) alleging that several terms in Mitolo’s standard form contracts with potato farmers are unfair contract terms.

It’s alleged the Mitolo Group enters into exclusive supply contracts with potato farmers for a specified volume of fresh potatoes each season but does not determine the price it will pay until the potatoes are ready for harvest.

The ACCC alleges the contract terms which are unfair include ones that allow Mitolo to:

- unilaterally determine or vary the price Mitolo pays farmers for potatoes;

- unilaterally vary other contractual terms;

- declare potatoes as “wastage” without a mechanism for proper review;

- prevent farmers from selling potatoes to alternative purchasers.

ACCC deputy chair, Mick Keogh, said it will also be the first action over unfair contract terms action in the agriculture industry.

“The issues in this case go to the heart of concerns about unfairness in the agriculture sector that led to the establishment of the ACCC’s dedicated Agriculture Unit, which is investigating agricultural supply chains and engaging with the sector,” Keogh said.