EastAUSmilk Congratulates ACCC for Processor Prosecution

EastAUSmilk CEO Eric Danzi has congratulated the Australian Competition and Consumer Commission for action taken to ensure the integrity of the Dairy Industry Code of Conduct, by prosecuting Lactalis, a large milk processor operating in all states.

The Federal Court found Lactalis had entered into contracts with farmers, which included terms allowing Lactalis to unilaterally terminate agreements for irrelevant behaviour, including when, in Lactalis’ opinion, the farmer had engaged in “public denigration” of processors, key customers or other stakeholders. In other words, contracts were designed to smother dairy farmers engaging in public debate about their industry!

In some cases, famers have no say over the content of contracts, and must sign the contract drafted by the processors, to sell their milk.

The Court also found that Lactalis had breached the Code by failing to publish milk supply agreements on its website.

Lactalis was fined nearly $1 million.

A review of the dairy code is due now, and eastAUSmilk has called on the Federal government to make that review urgent, so loopholes which have become apparent since it commenced can be addressed, and it remains effective and relevant. They also believe it needs to address vertical integration in the dairy supply chain, to protect dairy farmers from potential misuse or market power, as well as minimum pricing in long term contracts, and several other improvements.

EastAUSmilk has met with Ministers or their offices, and departments, in the New South Wales, Queensland, and Commonwealth Governments, to press the need to review the Code now. They say this Federal Court finding, and substantial fine, proves that some milk processors won’t comply with their obligations under the Code, and will try to get away with breaching it if they can. They want a Dairy Industry Code which forces processors to change the culture of bullying farmers.

Mike Smith, eastAUSmilk Government Relations Manager