ACCC urges dairy processor compliance with mandatory code
Some dairy processors need to properly observe the mandatory industry code, the nation’s competition watchdog says, rebuking two operators in the process.
DAIRY processors need to keep their farmgate disclosures simple and timely, the nation’s competition watchdog says.
The Australian Competition and Consumer Commission has outlined areas for improvement in the mandatory Dairy Code of Conduct — one year after the new rule book came into effect.
ACCC deputy chairman Mick Keogh listed processor compliance with the publishing obligations, as well as the code’s single document, termination and supply period requirements, as “areas of concern”.
He said the commission had worked with both farmers and processors to better understand their obligations and rights under the mandatory code.
“In the short time that the code has been in effect we’ve seen it bring some positive changes to the industry, but we’ve also identified areas where processors need to improve their compliance,” Mr Keogh said.
“We invite processors to review their milk supply agreements in light of this update and seek legal advice if needed. We also encourage farmers and other dairy industry participants to re-familiarise themselves with their code rights and obligations.”
One of the code’s main obligations is that processors publish milk supply agreements by 2pm on June 1 each year.
The ACCC has announced two “enforcement outcomes” relating to failures to publish by the deadline. The watchdog revealed that “investigations into others continue”.
In August, Saputo promised to review and improve its internal processes after the Canadian-owned processor failed to publish its milk supply agreements by the required 2pm deadline.
Saputo published the milk supply agreements it intended to offer for the 2020-21 milk season at around 3pm on June 1 — allowing it to assess what its rivals were offering.
In October, the Union Dairy Company paid a five-figure penalty after the ACCC alleged it failed to comply with its code obligations.
Riddoch Trading Proprietary Limited, trading as the UDC, paid the $10,500 penalty but The Weekly Times notes the payment was not an admission of a contravention of the code.
However, the ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business has contravened a penalty provision of the mandatory code.
Mr Keogh said enforcement action to date shows the ACCC takes noncompliance with code obligations seriously.
“Processors and farmers must also be certain that the agreements themselves, including the terms, comply with the code’s various requirements,” he said.
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