Update on the Dairy Code of Practice


Article by Australian Dairy Farmers

The Code of Practice for Contractual Arrangements between farmers and processors was a major achievement for the industry and will help ensure greater transparency and fairness in milk supply and pricing.

Officially drawn up in June 2017 by the Australian Dairy Industry Council (ADIC), with farmers through Australian Dairy Farmers (ADF) and processors through Australian Dairy Products Federation (ADPF) who worked collaboratively and in good faith to establish the code.

ADF believes that contracts need to be fair, simple, realistic and easily understood by both parties. ADF also believed that contracts need to comply with the Unfair Contracts Legislation that come into effect November 2016.

Since June, ADF has spoken directly to quite a number of farmers regarding the terms set out in the Code of Practice and their individual contracts or supply agreements. The majority of questions have centred on issues around dual supply, loyalty payments and transparency of payments. Many of these issues are now with the ACCC and will be further examined by industry in 12 months, when the Code is due to be reviewed.

At the time the Code was released all state dairy organisations had signed. Out of the processors Fonterra, Murray Goulburn, Bega, Lion, Warrnambool Cheese and Butter, Burra Foods, Australian Consolidated Milk and Freedom Goods Group had signed. Last month Parmalat signed.

If you believe your contract or supply agreement is unfair:

  • Talk to your processors and ask them to remove the term or amend it so it is no longer unfair
  • Contact the Small Business and Family Enterprise Ombudsman
  • Contact your local state or territory consumer protection agency
  • If you have a specific issue, contact ADF to have it registered and raised confidentially with the ACCC
  • Contact the ACCC 
  • Talk to a lawyer

If you are concerned about the terms of a contract you have received, you can visit the ACCC’s Agriculture Unit for information about the law. Website:https://www.accc.gov.au/about-us/information-for/agriculture
 ; ACCC toll free number is 1300 302 502.

Finally, if you operate a small dairy business or family enterprise in dairy and has been affected by unfair contract terms, you can also make a complaint to the Australian Small Business and Family Enterprise Ombudsman. Website: http://www.asbfeo.gov.au/dairy-industry-consultation
 / ; ASBFEO toll free number is 1300 650 460.