Compliance with the Dairy Code has generally improved over the past year, the ACCC reports, but dairy companies have been warned the regulator will focus more on enforcement from now on.
Ahead of the 2021-22 season, the ACCC it remains concerned by dairy processors failing to publish dispute reports, using rolling agreements instead of defining contract end dates, and prematurely removing milk supply contracts from their websites.
This year, the ACCC will shift its focus from education and engagement work to enforcement.
“As is appropriate with a new industry code, we have engaged extensively with the dairy industry over the past two years to assist processors and farmers to understand their rights and obligations under the Dairy Code,” said ACCC deputy chair Mick Keogh.
“Processors have now had enough time to learn what their obligations are under the Dairy Code, and future instances of non-compliance face a greater risk of enforcement action by the ACCC.”
He said that while individual instances of non-compliance may cause little harm, widespread non-compliance undermines the ability of the Dairy Code to improve transparency across the industry.
“Transparency is the key to addressing the bargaining power imbalances that can harm dairy farmers,” he said.
“The Dairy Code has clearly fostered positive changes in the industry by improving the transparency and certainty of agreements between farmers and processors, but we have identified a number of areas where some processors need to improve their compliance.”
Keogh urged processors to review their milk supply agreements and contracting practices and to consider seeking legal advice to ensure they fully comply with the code.
The Competition and Consumer (Industry Codes – Dairy) Regulations 2019 (AKA the Dairy Code) is a mandatory industry code regulating the conduct of dairy farmers and processors in their dealings with one another. The ACCC is responsible for enforcing it.