Dairy processers “should be aware of their legal obligations” under the mandatory Dairy Code of Conduct enforced by the Australian Competition & Consumer Commission (ACCC) as it urges businesses to publish their milk supply agreements by the 1 June deadline.
The mandatory code, which came into effect in January 2020, was introduced to combat systemic industry problems, such as imbalances of bargaining power between processors and farmers.
As part of the Code, dairy processors are obligated to publish details about the milk supply agreements for the coming financial year on their website by 2pm on 1 June to allow farmers to compare processors’ minimum prices and contract terms. The details must "cover all the circumstances in which [processors] intend to purchase milk".
The published report must also include information about disputes related to the processor’s milk supply agreements, which were subject to mediation or arbitration in the 12 months up to 30 April.
The commission states, “processors whose milk supply agreements were not subject to disputes must still meet this reporting obligation”.
ACCC deputy chair Mick Keogh said the commission will continue to be active in enforcing the dairy code this year, particularly when it comes to processors’ requirement to publish dispute reports on time.
“The reports allow farmers to see if processors have been involved in any recent disputes about their milk supply agreements, which can help farmers decide who to supply their milk to,” said Keogh.
“As well as checking the compliance of milk supply agreements and dispute reports immediately after the 1 June publishing deadline, we’ll be conducting risk-based audits throughout the year, which includes randomly selected traders and those with a history of complaints made against them. These audits can occur at any time during the year.”
Keogh said that the Code has brought “some positive changes” to the dairy industry, however areas of compliance must be addressed and improved.
“We encourage farmers to closely read and compare the milk supply agreements on offer, once they’re published on 1 June,” he said.
In October 2020, Union Dairy Company (UDC) was fined $10,500 after allegedly failing to publish a non-exclusive supply agreement until two months after the 1 June deadline last year.