The Australian Competition and Consumer Commission (ACCC) is investigating allegations of unconscionable conduct towards growers by one of the country's major vegetable processors.
The ACCC has written to suppliers of McCain Foods (Aust) Pty Ltd in Tasmania and Ballarat, Victoria asking for details about contract negotiations dating back to 2010.
The letter, obtained by the ABC, says the ACCC "has received complaints alleging McCain has engaged in misleading or deceptive conduct in its dealings with potato growers".
The letter also states, "The ACCC is concerned McCain may have engaged in unconscionable conduct as a result of its conduct towards growers, including by exerting undue pressure on growers during contract negotiations."
McCain Foods is a privately owned, multinational frozen food producer, manufacturing products including french fries, pizzas and prepared meals.
It runs factories in Ballarat, Lisarow in New South Wales and Smithton in Tasmania.McCain confident 'outcome will be OK'
McCain Foods agricultural manager Gregory Bullock confirmed the company was aware of the investigation.
"We've provided some information at their request."
Tasmanian potato growers called for an ACCC investigation in 2012 when they alleged McCain cut contracts and ceased collective bargaining.
Mr Bullock said he believed McCain's conduct and contract terms were fair.
"We're confident that the outcome will be OK," he said.
An ACCC spokesperson said they were unable to comment on any potential investigations.
"Competition and fair trading in the agriculture sector is an enduring priority for the ACCC," the spokesperson said.
"The ACCC from time to time seeks information from farmers in pursuit of this enforcement priority."Investigation 'a long time coming'
Former Senator for Victoria, John Madigan, has welcomed the ACCC investigation.
Mr Madigan was a vocal advocate for potato growers in 2011 when industrial action took place.
He said the investigation has "been a long time coming" and said he knows of behaviour by McCain Foods that is 'deplorable'.
"The way people were played off against each other, one would question whether it's conscionable conduct," he said.
"The correct place for this to be done is the ACCC."
Mr Madigan said the ACCC focus on processor conduct will "benefit all people in primary production."Agribusinesses 'on notice' with ACCC
Tasmanian Farmers and Graziers Association executive officer Peter Skillern said the ACCC had increased scrutiny on agribusinesses since the establishment of the Agriculture Consultative Committee in 2016.
"The ACCC over the last two years or so has certainly had a focus on the agricultural sector," he said.
Mr Skillern served on the committee for two years.
"That has certainly been an eye-opener for the ACCC and has led to some of the investigations that are ongoing," he said.
"I think agribusinesses are now on notice that the ACCC and the legislation under which they operate applies across the entire Australian economy, and agriculture doesn't have any exemption to that."
Last month, the ACCC began proceedings against the largest potato wholesaler in Australia, Mitolo Group, alleging that several terms in Mitolo's standard form contracts with potato farmers were unfair contract terms, and that Mitolo had breached the Horticulture Code in its dealings with farmers.