Fonterra Australia has reached a $25 million settled for a class action by farmers, stemming from retrospectively cutting milk payments and instigating a $60 million price clawback in 2016.
Fonterra said the agreement was reached without an admission of liability and subject to court approval.
The farmers alleged the decision was unlawful and was misleading, deceptive and unconscionable conduct, causing financial and mental distress.
The now defunct Murray Goulburn (MG) (it was bought by Saputo for $1 billion in 2018) also engaged in a price clawback. In 2017, MG said it would scrap the repayments and record a $148 million write-down.
The Australian Competition and Consumer Commission (ACCC) launched legal proceedings against MG, alleging it had engaged in unconscionable conduct and made false or misleading representations over the milk price decreases
The clawback by MG and Fonterra led to an 18-month inquiry by the ACCC and the introduction of a mandatory code of conduct between dairy processors and farmers.
MG’s managing director Gary Helou was fined and ordered to leave the industry for three years for his involvement.
In 2020, the Australian Securities & Investments Commission (ASIC) disqualified Helou and former chief financial officer Bradley Hingle from managing corporations following an investigation into their role in misleading representations over farmgate milk price decreases in 2016.
Fonterra said the $25 million included interest and all costs and was provided for in last year's financial statements.
New CFO appointed
Fonterra has appointed Neil Beaumont as its new CFO, he will start in the role in early February 2023.
Most recently, Beaumont was senior managing director, chief financial and risk officer at Canada Pension Plan Investment Board. He lead operations, finance, and risk functions for the CAD $500 billion investment fund.
Fonterra CEO Miles Hurrell said Beaumont's experience as a global financial leader and in strategic implementation would be an asset to Fonterra.
He has previously worked for BHP Billiton in Chile and Australia and at KPMG.
