MISLEADING claims about a barley variety’s straw strength have seen a seed retailing business hit with a whopping $1 million slap across the wrist.
The Federal Court has ordered Landmark, the parent company of seed business, Seednet, to pay a $1m penalty, after the Australian Competition and Consumer Commission (ACCC) took the company to court for making false, misleading and deceptive claims in a fact sheet regarding its barley variety, Compass.
Seednet must also pay $50,000 as a contribution to the ACCC’s legal costs.
The heavy penalty is believed to be the first time in Australian legal history a seed distribution business has been punished on the grounds of making false or deceptive claims in information provided about a particular variety.
At the time of the legal action ACCC deputy chairman, Mick Keogh, said the case revolved around claims made surrounding the performance of the Compass variety, in particular its fungal disease resistance and straw strength.
Following the decision he said it sent a clear precedent to other agronomic business.
“Exaggerated marketing of new agricultural produce is a major concern across the industry,” he said.
“Seed companies, and agribusinesses more generally, are warned that they must have a proper basis for marketing the qualities of new agricultural varieties and must not misrepresent the properties or performance of new products.”
He said Seednet’s actions were not up to the standard required by the industry.
“Seednet’s conduct was unacceptable because it misled farmers into sowing barley crops under a false impression about the qualities of the crops they were planting.”
The false claims were made from December 2014 onwards.
In acknowledging the Federal Court decision, Landmark admitted that certain statements were misleading and has agreed to pay a penalty.
It has also agreed to enhance its existing compliance program.
Grower groups welcomed the fine, saying it sent a strong message to the industry.
“It is clear signal that seed companies cannot just go around making claims without the evidence to back it up,” said Grain Producers Australia chairman Andrew Weidemann.
“This probably hasn’t been an isolated issue but seed companies are going to think twice before making exaggerated statements about the performance of their varieties now and that helps growers make the right decisions in terms of what to plant.”
Compass was developed by the former University of Adelaide breeding program and was designed as a replacement to the Commander variety, also distributed by Seednet.
The ACCC alleged that by at least December 2014, Seednet had received information which should have made it aware that Compass’ performance did not support the representations being made in fact sheets on the variety.
The ACCC acted on the issue following tip-offs from growers disappointed with the variety’s performance.
There was widespread disappointment with the performance of Compass during the wet 2016 season in terms of its straw strength, with many reports of the crop lodging.