Source: Australian Ministers for Regional Development
Coles Supermarkets Australia and Brownes Foods Operations have each paid $39,600 in penalties after the ACCC issued each company with two infringement notices for separate alleged contraventions of the Dairy Code of Conduct.
The ACCC alleges that Coles breached the Dairy Code by publishing two separate milk supply agreements that required the supplier to provide milk exclusively to Coles, while also imposing a cap on the maximum volume of milk that could be produced.
Separately, the ACCC alleges that Brownes breached the Dairy Code by publishing two milk supply agreements that did not clearly specify the minimum prices that applied throughout the entire supply period and did not justify the reason for the minimum prices.
“Dairy farmers need clear accurate information about supply terms and prices when deciding who they will supply,” ACCC Deputy Chair Mick Keogh said.
“Terms that limit a farmer’s ability to supply, or documents that don’t properly set out minimum prices and the reasons for them, undermine the transparency the Dairy Code is designed to deliver.”
“Volume caps in exclusive milk supply agreements are particularly concerning. They can cause significant harm to farmers by limiting milk production while also restricting their ability to supply multiple processors,” Mr Keogh said.
As part of its compliance and enforcement program, the ACCC engaged with three other dairy processors about minor alleged breaches of the Dairy Code.
Those traders have taken measures to improve their compliance after the ACCC issued warnings to them.
“Our Dairy Code enforcement approach is to be proportionate and fair, which means taking stronger enforcement action for more serious breaches or repeated non-compliance,” Mr Keogh said.
The ACCC encourages all dairy processors to review their obligations under the Code and ensure that all required documents are compliant and published by the 1 June 2026 deadline imposed by the Code.
More information about the Code is available at Dairy Code of Conduct.
Background
Coles is a large milk processor, purchasing approximately 490 million litres of fresh milk annually across the southern dairy regions and Western Australia. Coles sells its dairy products to consumers through its supermarkets.
Brownes is a medium-sized milk processor located in Western Australia, purchasing approximately 150 million litres of milk per year from around 50 dairy farmers.
The Dairy Code of Conduct is a mandatory industry code, applying to supply relationships between dairy farmers and processors who purchase milk directly from farmers and have an aggregated annual turnover of more than $10 million.
The Code requires dairy processors that intend to purchase milk in the next financial year to publish certain documents on their websites by 2.00 pm (AEST) on 1 June each year (or the next business day if 1 June is not a business day).
These documents include standard form milk supply agreements (and statements of circumstances explaining when the processor would enter into them), and a report on disputes that were subject to mediation or arbitration in the previous 12 months.
The ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business has contravened a civil penalty provision of the Code.
The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Code.