Friday, July 26, 2024

Brownes Dairy pays penalties after alleged Dairy Code breaches

Brownes Food Operations Pty Ltd (Brownes Dairy) allegedly failed to comply with the Dairy Code of Conduct in 2020.

With this, they have paid penalties totalling $22,200 after the ACCC issued it with two infringement notices.

The Dairy Code requires most dairy processors to publish on their websites on 1 June each year, standard form milk supply agreements to cover all the circumstances in which they intend to purchase milk in the coming financial year on their websites.

This allows farmers to compare processors’ minimum prices and contract terms.

The infringement notices for publishing two standard form milks supply agreements (exclusive and exclusive A2) on its website in June 2020 which allegedly did not comply with the Dairy Code by:

  • Not specifying a definite end date of the supply period;
  • Allowing Brownes Dairy to unilaterally vary the agreement in circumstances other than those specified in the Dairy Code;
  • Allowing Brownes Dairy to unilaterally reduce the minimum price for milk supplied (‘unilateral prospective step down’) in circumstances other than those specified in the Dairy Code.

“It is critical that processors take active steps to ensure compliance with the Dairy Code so that farmers have the certainty and transparency in relation to milk supply agreements that the Code is intended to provide,” says ACCC Deputy Chair, Mick Keogh.

Brownes Dairy addressed the ACCC’s concerns in the 2021-22 agreements, which it published last month.

Additionally, they undertook to write to farmers that it had contacts with, advising it will only exercise its rights under existing agreements to the extent they are consistent with the terms of these new agreements.

Mr Keogh adds, “We are continuing to assess agreements published on 1 June this year, and any identified breaches may result in the ACCC taking enforcement action where appropriate.”

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