Dairy Farmers Milk Co-operative hit with ACCC fine over alleged code breach

While a number of processors have been called out by Australia’s consumer watchdog, co-operatives have largely been on mandatory code easy street. Until now.

The Australian Competition and Consumer Commission has handed out several fines since the introduction of the mandatory dairy code last year. Picture: Andy Rogers

One of Australia’s largest dairy co-operatives has been slapped with a five-figure fine for allegedly failing to comply with the industry’s code of conduct.

The Dairy Farmers Milk Co-operative Limited (DFMC) has paid a penalty of $11,100 after the Australian Competition and Consumer Commission issued it with one infringement notice.

The dairy code of conduct requires most companies to publish standard form milk supply agreements on their websites by 2pm on June 1 each year.

The ACCC stipulates that agreements must cover all the circumstances in which the company intends to purchase milk in the upcoming dairy season, so farmers can compare the minimum prices and contract terms on offer.

The consumer watchdog has alleged that DFMC did not publish any of its standard form milk supply agreements for the 2021-22 financial year on its website by the publication deadline.

DFMC has since published all of its milk supply agreements on its website.

ACCC deputy chairman Mick Keogh said the dairy code imposed certain obligations on all companies that buy milk from farmers.

“While DFMC doesn’t process milk, it was buying milk from member farmers to supply a processor, and so has the same legal obligations under the code,” he said.

“Failing to publish milk supply agreements on time makes it more difficult for farmers to access key information about the milk supply terms on offer.

“We know that many farmers have to make time-critical supply decisions in June each year.”

DFMC purchases about 185 million litres of milk per year, which it sources from over 160 dairy farmers located across Victoria, South Australia, New South Wales and Queensland.

A spokeswoman for DFMC said the co-operative was apologetic for the breach and would work to ensure compliance into the future.

“DFMC acknowledges and apologises to our famer members and the ACCC for the breach,” the spokeswoman said.

“We have worked openly and constructively with ACCC staff to address the issues raised in the infringement notice.

“With a small management team, DFMC manages more than 20 different farmgate milk supply agreements and is now undertaking a review of all processes and timelines associated with the requirements of the Code, with a view to making the necessary changes to ensure compliance in 2022.

“The DFMC independent director and Chair of the Audit and Risk Committee will guide this review process and present the outcomes to the DFMC Board.

“DFMC continues to be a strong supporter of the Code and the principles underpinning its

development.”

Mr Keogh said the code was introduced to improve price transparency in the dairy industry.

“So it is essential that processors and co-ops make their milk supply agreements publicly available by the 2.00pm deadline on 1 June,” he said.

“The Dairy Code remains a priority for the ACCC, and it’s important that milk processors and other milk purchasers understand the requirements of the Dairy Code and actively comply with them.”