The ACCC has updated its guidance on some key elements of the Dairy Code, ahead of the new dairy season and the important 1 June deadline for dairy processors to publish their new milk supply agreements.
The updates to the ACCC’s Dairy Code guidance, published today, provide more detail on its interpretation of the code’s ‘single document’ requirement, arrangements for cooperatives and collective bargaining groups, what constitutes a ‘material breach’, loyalty payments and other bonuses, and the requirement to publish dispute reports.
A new processor checklist summarises processors’ key obligations under the code.
“Now that the code has been in operation for nearly two full seasons and the dairy industry has provided feedback, we have updated our guidance to users in light of some of the practical issues that have come up,” ACCC Deputy Chair Mick Keogh said.
“The updated guidance is consistent with our previous information. Given processors are approaching the third season opening since the code came into effect, we expect them to be across their obligations.”
The ACCC is this year shifting its focus from Dairy Code education and engagement work to enforcement.
“Processors that don’t comply with the code now face a greater risk of enforcement action by the ACCC,” Mr Keogh said.
“If there are processors who are still unsure of their obligations under the code, we encourage them to seek legal advice as soon as possible.”
“It’s important that farmers understand their rights and responsibilities under the code. In particular, farmers should resist being rushed, and should carefully consider all the offers available to them before signing a supply agreement,” Mr Keogh said.
“Farmers need to be aware that processor season price projections made at meetings or in processor communications are not necessarily guaranteed, and what really matters is the minimum price detailed in a Milk Supply Agreement.”
The ACCC is currently conducting further audits of processors, and will undertake more compliance checks after the 1 June 2022 publication deadline.
The updated guidance is a result of the ACCC’s observations on processors’ compliance with the code over the past two seasons, industry feedback, and a recommendation made in the Government’s 2021 Dairy Code Review for additional guidance on particular topics.
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.
The code came into effect in January 2020. With Australian dairy seasons starting in the middle of the calendar year, winter 2022 will be the start of the third full season under the code.
The Government conducted its scheduled first review of the code in 2021. The ACCC made a submission to the review. The review’s report was publicly released in February 2022. The Government response to the review report was released in March 2022.