Eric Danzi: Queensland’s call for mandatory dairy code of conduct alterations

The introduction of the mandatory dairy code of conduct last year provided some useful guardrails for the sector, Eric Danzi writes, but a few tweaks to the regulations wouldn’t go astray.

QDO Executive Officer Eric Danzi & President Brian Tessmann.

IT IS a hard thing to admit, but Australia’s dairy industry needs an intervention. We need some tough love to get our national organisational structures and supply chain relationships sorted. So, I commend the Federal Government and the Australian Competition and Consumer Commission’s (ACCC) dedication to unravelling the underlying issues in the national dairy industry over the last 12 months.

December saw the ACCC wrap up a number of its inquiries that have touched on dairy conducted over the last six months.

From a farmer’s perspective, perhaps the most important was the 11-page Dairy Code: Initial Observations on Compliance report that was released in the week before Christmas.

In the report, the ACCC has made some recommendations on where the code should be improved and have signalled the need for government to address these in the 2021 review. This paper is a precursor to the full investigative review that the ACCC has committed to which was due to start last month.

There were some processors who, pending the outcome of ongoing investigations, may have already breached one or more areas in the code.

Some transgressions were administrative and, while unprofessional, were not harmful to suppliers.

Other instances cited to the ACCC were not so accidental and go to the heart of the reason that a mandatory dairy code was necessary.

Given the importance of this review and the Queensland Dairy Organisation’s ongoing advisory role in the code, we will be seeking that the code is amended so that:

•non-exclusive contracts have competitive pricing and realistic volumes to be compliant with the code;

•contracts must have a definite end date; and

•contracts that are automatically rolled over are listed as non-compliant.

We will also be seeking clarification as to why there was no comment made in the report regarding minimum pricing clauses which seems strange given their importance in contract negotiations.

The code is still in its infancy with several areas requiring further clarification and adjustment. That the ACCC has given dairy such focus is to be commended. Without some formalised level of government support, at all levels, our dairy farmers will continue to bear the brunt of the industry’s corporate greed.

- Eric Danzi is the Queensland Dairy Organisation’s executive officer.

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