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The ACCC has instituted proceedings against Murray Goulburn, claiming it engaged in unconscionable conduct and made false or misleading representations over its farmgate milk price (FMP) decreases in April last year.

The ACCC is also alleging that former managing director Gary Helou and former chief financial officer Bradley Hingle were knowingly involved. 

The allegations relate to representations made by Murray Goulburn to its Southern Milk Region dairy farmers between June 2015 and April 2016 about the average farmgate milk price it expected to pay them during financial year 2015/16.

 “The ACCC alleges that Murray Goulburn’s conduct had an adverse impact on many farmers who, as a result of Murray Goulburn’s representations regarding the farmgate milk price, had made business decisions,” ACCC Chairman Rod Sims said.

“The farmers relied on Murray Goulburn’s representations and were not expecting a substantial reduction in the farmgate milk price, particularly so close to the end of the season when it was not possible for them to practically readjust their expenditure."

Many farmers are in a relatively vulnerable trading position, Sims said, and rely on transparent pricing information in order to budget effectively and make informed business decisions.

"In these circumstances, farmers were entitled to expect Murray Goulburn to have a reasonable basis for determining its pricing, and to regularly update farmers if there was any change in forecast prices.”

Murray Goulburn issued a statement acknowledging the proceedings. 

"MG is considering the proceedings, however notes that ACCC has decided not to seek a pecuniary penalty against MG," the dairy processor said.

The ACCC also announced it won't take action against Fonterra Australia over its farmgate milk price.

"Separately, after careful consideration, the ACCC has decided not to take any further action against Fonterra Australia in relation to the step-down of its FMP, announced one week after Murray Goulburn’s revised Final FMP in April 2016.

“A major consideration for the ACCC in deciding not to take action was that Fonterra was more transparent about the risks and potential for a reduction in the farmgate milk price from quite early in the season,” Sims said.

The ACCC is continuing with its broader inquiry into the competitiveness, trading practices, and transparency of the Australian dairy industry, a key focus of which is milk pricing transparency.

The ACCC is due to submit its report following the inquiry to the Treasurer before 1 November this year.

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