The ACCC is not only closely monitoring the introduction of the new mandatory dairy code of conduct, but is ready to take enforcement action where appropriate.
Part of the dairy code requires processors to only buy milk from farmers using compliant milk supply agreements, and to have published those agreements online before 2pm on 1 June 2020.
Agreements must include a minimum milk price, among other conditions.
“The new code is designed to address a significant imbalance in bargaining power between processors and farmers,” says ACCC Deputy Chair Mick Keogh.
The ACCC has accessed more than 100 published milk supply agreements since 1 June, and it appears most processors published at least one milk supply agreement by the deadline. However, the ACCC is undertaking a detail review of compliance, which includes assessing whether the terms of milk supply agreements comply with the code.
“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.
“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 also has the power to require corporations which are subject to the code to provide information and documents which the code requires them to keep or generate, and to carry out compliance checks.”
Mr Keogh further explains, “As the dairy code is legally binding, breaches may result in enforcement action by the ACCC, including going to court to seek pecuniary penalties.”
For more information, including guidance for farmers and processors, please visit: Dairy Code of Conduct.