Dairy Code of Conduct

  • The Dairy Code of Conduct is an industry code that regulates the conduct of dairy farmers and buyers of raw milk from those farmers. Raw milk must only be bought from dairy farmers under a milk supply agreement that complies with the Code.
  • We are responsible for enforcing compliance with the Code, including through issuing infringement notices or seeking civil penalties through court proceedings for non-compliance.
  • We do not give legal advice or resolve individual disputes. You should obtain legal advice on how the Dairy Code applies to you and your circumstances.

Dairy Code overview

The Code contains a range of obligations for both farmers and processors. The ACCC has produced guidance materials to help parties understand their obligations under the Code, including fact sheets and compliance reports.

Application of the Dairy Code and exemptions

The Code regulates the conduct of dairy farmers and those who buy milk from them, including processors, milk brokers, cooperatives, and supermarkets. All milk supply agreements are required to comply with the Code from 1 January 2021. Some milk supply agreements may be exempt from some requirements if the processor is a small business entity.

Good faith under the Dairy Code

Under the Dairy Code of Conduct, processors and farmers must deal with each other in good faith. This includes processors that are small business entities. Failure to act in good faith can lead to penalties for breaching the Code.

Key requirements for milk supply agreements

The Dairy Code requires processors to only purchase milk under a milk supply agreement. All milk supply agreements must comply with the Code.

Minimum price under the Dairy Code

All milk supply agreements must include a minimum price payable for milk. A processor must not pay a farmer less than the minimum price, unless a permitted step-down has occurred.

Step-downs under the Dairy Code

The Dairy Code of Conduct places significant restrictions on step-downs in milk supply agreements.

Publishing obligations under the Dairy Code

Before 2 pm on 1 June (Australian Capital Territory time) each year, processors that intend to purchase milk during the upcoming financial year must publish their standard form milk supply agreements and reports on disputes on their website.

Single document, plain English & unwritten agreements

The Code allows parties to enter into milk supply agreements either in writing or verbally. Where an agreement is not in writing, the processors must ensure a written record of that agreement is provided to the farmer. Agreements and written records must consist of a single document, and must be written in plain English or include a plain English overview.

Exclusive agreements under the Dairy Code

The Code permits the use of both exclusive and non-exclusive milk supply agreements. There are some restrictions on the terms that can be included in exclusive agreements. All processors must ensure they publish a non-exclusive version of their standard form agreements.

Enforcement of the Dairy Code

The Dairy Code of Conduct contains penalty provisions. Not complying with a penalty provision could result in the ACCC taking court action seeking a financial penalty for the breach, or issuing an infringement notice.