2021 ACCC Priorities – Dairy Code
The Dairy Industry Code of Conduct (the Code) aims to improve the clarity and transparency of trading arrangements between dairy farmers and those buying their milk.
We’re expecting continued education and outreach from the Australian Competition and Consumer Commission (ACCC) in 2021 in line with ACCC’s continued focus about the supply of perishable agriculture products and agricultural supply chain arrangements generally.
Background to the Code
The Code commenced in January 2020 and applies to dealings between a dairy farmer and any corporation that purchases milk from them (called ‘processors’ under the Code).
Some sections of the Code do not apply when a processor is a small business, or to arrangements that were entered into before 1 January, unless that contract is varied or renewed.
Broadly, the Code provides both processors and farmers with a number of rights and obligations. These include:
an obligation on both farmers and processors to act in good faith
a set of minimum disclosure requirements and protections that must be included in every milk supply agreement regulated by the Code
a right to certain dispute resolution processes, including mediation.
Under the Code, farmers and processors need to keep a written record of a milk supply agreement, and any variations or terminations of the agreement, as well as other specified records, for at least six years.
Compliance Risk areas
All milk supply arrangements must comply with the Code, and as arrangements in place prior to 1 January 2020 come up for renewal or are varied, the Code will begin to apply to these updated arrangements.
Be aware the Code applies to written and verbal arrangements, and farmers can expect written confirmation of any verbal arrangement from processors subject to the Code.
Parties should also be aware f the restrictions on price step-downs and step-up, and exclusivity that apply under the Code, and ensure their arrangements are compliant.
Paul Gray
Principal
T: 03 5225 5231
E: pgray@ha.legal
Rod Payne
Principal
T: 03 5226 8541
E: rpayne@ha.legal
