Australia’s largest dairy processor Lactalis has been found guilty of breaching the Dairy Code of Conduct by the Federal Court.
The code which came into effect in January 2020 addresses systemic transparency issues and bargaining power imbalances between dairy farmers and milk processors.
In court proceedings brought by the Australian Competition and Consumer Commission (ACCC), the dairy company failed to meet some of its obligations under the Code in the 2020-21 milk season.
Lactalis breached the code when it failed to publish its milk supply agreements on its website by the deadline set in the code. Instead, it instructed dairy farmers to sign-up through a web portal to receive them by email.
ACCC deputy chair, Mick Keogh, said this is an important case as these are the “first proceedings” the regulator has instituted under the Dairy Code of Conduct.
“The decision is a win for dairy farmers who generally have limited bargaining power in their dealings with much larger processors.
“In breaching the code’s requirement to publish its milk supply agreements by the deadline, Lactalis made it harder for farmers to compare milk prices and contract terms across different processors.”
Keogh said this case should serve as a “reminder” to all dairy processors that failure to comply with the code may result in serious consequences and enforcement action from ACCC.
“It is [also] very important that farmers have access to a complete record of the milk supply agreement they have signed up to. This safeguards against any subsequent changes to the agreement, and allows both parties to understand their rights and obligations.”
Lactalis produces a wide range of dairy products across brands including Pauls, Oak, Vaalia and Ice Break.
