ACCC’s new dairy code warning

The Australian Competition and Consumer Commission has issued another warning over the dairy code of conduct.

Under the code, processors had to have published their milk supply agreements online by June 1, outlining minimum milk prices and other conditions.

Most processors have published at least one agreement to deadline and the watchdog has now said they will conduct a detailed review of the more than 100 supply agreements they have viewed, to ensure they comply with the code. And warn they will take action where necessary.

ACCC Deputy Chair Mick Keogh their detailed review is to ensure imbalances in bargaining powers between processors and farmers are addressed, by providing farmers with greater access to industry minimum standards.

“Milk supply agreements offered by dairy processors must meet certain minimum standards, like including cooling off periods for farmers while not containing contract terms that were previously used to push risk onto farmers”, Mr Keough said.

“The ACCC is aware of concerns that certain processors allegedly failed to publish milk supply agreements by the specified deadline, and concerns about the content of some agreements, and is investigating these matters.”

“We are actively engaging with farmers and processors and closely watching adherence to the code so it can deliver the intended benefits to farmers and the whole industry. We note that some processors have voluntarily changed their approach after being contacted by the ACCC regarding code compliance issues.”

The ACCC can take enforcement action for any breaches, including seeking to issue pecuniary penalties.

The dairy code, which came into effect on January 1 this year, applies to all farmers and dairy processors (bar those defined as a small business entity) and resulted form the watchdog’s 2018 dairy inquiry.

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