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Dairy code compliance an issue in Australia

24 November 2021

Increased enforcement necessary

At the start of the  2021-22 season, Australian dairy processors were, for the most part, in compliance with the Dairy Code, said the Australian Competition and Consumer Commission (ACCC). 

The Dairy Code is a mandatory industry code that regulates the conduct of dairy farmers and processors in their dealings with one another. The ACCC is responsible for enforcing the code.

Some of the issues identified in the report include 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.

“While individual instances of non-compliance may only cause low levels of harm, widespread non-compliance undermines the ability of the Dairy Code to improve transparency across the industry," said ACCC Deputy Chair Mick Keogh. "Transparency is the key to addressing the bargaining power imbalances that can harm dairy farmers."

According to the report, processors’ main areas of non-compliance in the 2021-22 season are failing to publish a disputes report, and the removal of milk supply agreements before the end of the financial year.

The report also emphasises the need to make sure processors ensure their contractual requirements around renewal or termination of agreements do not have the effect of creating rolling agreements.

The report explains that the ACCC is shifting its focus from Dairy Code 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,” Keogh said. “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.”



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