ACCC finds Brownes Dairy in breach of Dairy Code

Brownes Dairy has been penalised $22,200 by the ACCC over two breaches of the Dairy Code of Conduct last year. Last year, the WA dairy producer published two standard form milk supply agreements on its website which failed to specify key terms such as a definite end date of the supply period, and allowing the company to unilaterally vary the terms of the agreement.

“It is critical that processors take active steps to ensure compliance with the Dairy Code so that farmers have the certainty and transparency in relation to milk supply agreements that the Code is intended to provide,” said ACCC deputy chair Mick Keogh.

“One of the requirements of the Dairy Code is that processors ensure their milk supply agreements are compliant before publishing them on their websites, and in this instance, Brownes Dairy published two supply agreements that were allegedly non-compliant with the code.”

Under the code, most dairy processors are required to publish on their websites, every June 1 a standard-form milk-supply agreement to cover all the circumstances in which they intend to purchase milk in the coming financial year. This allows farmers to compare processors’ minimum prices and contract terms.

According to a statement from the ACCC, Brownes Dairy addressed its breaches in the 2021-22 agreements published last month and has undertaken to write to farmers that it had contracts with, advising that it will only exercise its rights under existing agreements to the extent they are consistent with the terms of these new agreements.

“Ensuring compliance with the Dairy Code remains an ACCC priority. We are continuing to assess agreements published on June 1 this year, and any identified breaches may result in the ACCC taking enforcement action where appropriate,” said Keogh.