Regulation squeezes life out of market

TENANTS, growers and managers fear increasing regulation of Canning Vale’s Market City could reduce the market’s viability and force more of WA’s fruit and vegetable crop to be sold elsewhere.

The Perth Market Act, which dates back to 1926, is under review again, just four months after by-laws created by a previous review were brought into effect.

The review that created the new by-laws was ordered by the former WA Government and cost about $200,000.

Agriculture Minister Kim Chance has ordered a fresh review to answer agents’ concerns.

This review threatens to bring more regulation into Market City. Meanwhile, eastern states govern-ments have shed the last regu-lations covering their fruit and vegetables markets.

The Act covers Market City alone. Between 60 per cent and 70 per cent of WA’s fruit and vege-table crop is sold through there.

Perth Market Authority chair-man Lee Warnick said there was always a risk when there was a regulated body competing with other channels that were not nece-ssarily regulated.”

“Regulation could be counter-productive if it simply drives agents away,” Mr Warnick said.

“That is a conundrum the minister will have to face.”

Perth Market Authority CEO Robert Halliday said a couple of agents were moving out of Market City because they claimed the regulations were too tough.

The new by-laws, introduced on January 1, were designed to bring full transparency to dealings between agents and growers. However, some agents believe the by-laws are unworkable. Only 15 of the 23 at Market City have put them into effect.

WA Fruit Growers Association president Steve Dilley said problems began about three years ago when some agents started giving growers a net price that did not tell them how much their produce had sold for.

About 18 months later, agents were allowed to offer growers terms of trade.

Mr Dilley said some agents sent out letters to growers via registered mail offering them terms of trade. The catch was, non-return of the letter was considered agreement to the terms of trade.

There have also been grower concerns about related party transactions, where agents sell produce to companies they own, such as packing operations, before selling the goods to a third party such as a supermarket.

It is claimed some agents took commissions for both transactions.

Under the new by-laws, agents can undertake related party transactions providing the grower agrees to it. Agents also can sell goods through Saturday afternoon clearance markets and only offer a net price if the grower agrees.

But not all growers were unhappy about receiving net prices and negotiating terms of trade with agents.

Chamber of Fruit & Vegetable Industries president and Mercer Mooney managing director John Mercer said the complaining growers were pushing for a return to the days of auctions.

“That would force us to become sellers and not marketers,” he said.

“The 1926 Act doesn’t allow for modern marketing methods.”

Mr Mooney said his company’s job was to smooth out the peaks and troughs in the supply and demand cycle.

He believes the new by-laws make it impossible to do that.

“There are two agents out here offering commission and another five offering full transparency. If that’s what growers wanted, we wouldn’t have any fruit here,” Mr Mooney said.

About $65 million worth of fruit and vegetables goes through Mercer Mooney’s Market City operation yearly.

Mr Dilley said some growers preferred to negotiate terms of trade with agents, but those were usually the bigger growers.