Publishing obligations under the Dairy Code

The Dairy Code of Conduct imposes a number of obligations on processors to publish key documents on their website before 2 pm on 1 June (Australian Capital Territory time).

Publication and retention of milk supply agreements

The Code requires processors to publish on their website before 2 pm on 1 June (Australian Capital Territory time) as many standard form milk supply agreements as are necessary to cover all the circumstances in which the processor intends to purchase milk in the coming financial year.

The standard form milk supply agreements must:

  • comply with the Code were the processor to enter into a milk supply agreement in that form — for example, it must include a minimum price
  • be accompanied by a statement of circumstances setting out when the processor would enter into a milk supply agreement in that form
  • include a statement of justification for the minimum price set out in the milk supply agreement
  • be ‘genuine’, in that the processor must not refuse to enter into a milk supply agreement in that form, if the specified circumstances accompanying the agreement exist
  • remain on the processor's website until the end of the financial year to which they relate.

The Code does not prevent the processor from publishing new standard form agreements alongside the existing standard form agreements. The publication of new standard form agreements, including any new minimum prices, will not automatically affect any agreements after the 1 June deadline (for example, if the processor wishes to change the minimum price).

Publication and transparency

‘Publish’ is not defined in the Code. It has its ordinary meaning, having regard to its context and purpose.

Publication of standard form milk supply agreements is intended to provide transparency in the dairy industry and enable farmers to identify the best agreement for their circumstances.

As such, the ACCC considers that a processor must make the standard form milk supply agreements available to the general public, not behind a portal or other barrier.

We also consider that a link to the processor’s standard form milk supply agreements should be prominent and clearly visible on the front page of the processor’s website.

Retention of documents

After the 1 June publication deadline, the processor must not remove or vary any of the standard form milk supply agreements from its website before the end of the following financial year.

For example, if a processor publishes a standard form milk supply agreement on its website on 1 June 2022, the processor must not remove that standard form milk supply agreement before 1 July 2023.

Even if a processor publishes a new standard form agreement that is intended to take the place of a milk supply agreement that was published on 1 June, the initial milk supply agreement must remain on the processor’s website until the end of the following financial year.

Statement of circumstances

For each standard form milk supply agreement published on the processor’s website, the processor must also publish a statement setting out the circumstances in which the processor would enter into the standard form milk supply agreement. This is known as the statement of circumstances.

The Code does not state what can or cannot be included in a statement of circumstances. Processors should at least provide the necessary information that allows a farmer to understand:

  • whether the standard form milk supply agreement applies to their specific circumstances (e.g. production capacity, geographical area)
  • whether any other circumstances will determine whether the processor will enter into the agreement (e.g. whether the processor has already met their supply requirements for the coming financial year).

Cover all the circumstances

The Code requires processors to publish as many standard form milk supply agreements and statements of circumstances as necessary to cover all the circumstances in which they intend to purchase milk in the coming financial year.

The ACCC considers that in order to satisfy this requirement, processors must make a genuine attempt to:

  • catalogue all new milk supply agreements that they intend to enter into in the coming financial year
  • publish an appropriate standard form milk supply agreement and statement of circumstances for each of those agreements.

The ACCC considers that the processor must assess its intentions as of the publication deadline on 1 June. If a processor’s circumstances change such that it intends to enter into milk supply agreements that it genuinely did not intend to enter into on 1 June, it is unlikely the processor would have breached the Code for failing to publish those agreements by the publication date.

A processor’s intentions may also change in response to a farmer approaching the processor to negotiate a specific milk supply agreement for their circumstances. The Code expressly states that the above publication requirements do not prevent a processor from entering into a milk supply agreement that is not a standard form milk supply agreement published on the processor’s website, and there is no obligation on processors to publish any non-standard form agreements.

Must be genuine

If a processor publishes a standard form milk supply agreement on its website and that agreement is accompanied by a statement of circumstances in which it would enter into that agreement, then a processor will contravene the Code if it refuses to enter into that milk supply agreement with a farmer when the specified circumstances accompanying the agreement exist.

Non-exclusive milk supply agreement publishing requirements

The Code does not prohibit exclusive milk supply agreements.

Processors may include exclusive standard form milk supply agreements as part of their standard form milk supply agreements that are published by 1 June.

However, if a processor does publish an exclusive standard form milk supply agreement with an accompanying statement of circumstances, then the processor must also publish a non-exclusive standard form milk supply agreement covering the same circumstances.

This means for every statement of circumstances published before 2 pm on 1 June, a processor must publish either:

  • a non-exclusive standard form milk supply agreement, or
  • both an exclusive and non-exclusive milk supply agreement.

Exclusive and non-exclusive milk supply agreements must cover the same circumstances, but do not need to be on the same terms or have the same minimum price. All published standard form milk supply agreements must, if entered into in the form published, comply with the Code.

For more information on what constitutes exclusive supply within the meaning of the Dairy Code, see Exclusivity under the Dairy Code.

Statements of justification

The Code requires that any standard form milk supply agreement that is published on a processor’s website must include a statement of the processor’s justification for any minimum price specified in the agreement.

The Code does not define ‘justification’.

The explanatory memorandum for the Code states that a statement of justification ‘may include the factors that lead to the consideration of the prices offered but does not need to include commercial-in-confidence material such as algorithms of the specific level of weighting factors such as a currency’s hedged value that may contribute to generate the offered price.’

The ACCC considers this requirement will be satisfied in circumstances where the processor has provided a meaningful overview of the factors that have influenced the minimum prices included in its published agreements.

Publication of reports on disputes

By 2 pm on 1 June (Australian Capital Territory time), processors must also publish a report setting out:

  • the number of disputes arising under or in connection with their milk supply agreements that were the subject of mediation or arbitration that started or ended in the reporting period
  • information about the nature of these disputes
  • the number of mediations or arbitrations conducted
  • the average time taken to resolve these disputes
  • the outcomes of these disputes.

The report must cover a period of 12 months beginning on 1 May in the previous year. For example, by 2 pm on 1 June 2022, a processor must report on all reportable disputes that arose or were finalised between 1 May 2021 and 30 April 2022.

The report must not name or otherwise specifically identify farmers or any other person involved in a dispute. Processors must also comply with any confidentiality requirements relating to information disclosed or obtained in the complaint or dispute resolution process.

The Code does not provide an exemption on this reporting obligation for processors whose milk supply agreements were not subject to disputes. The ACCC considers that if processors do not have any disputes to report for the relevant period, they must publish a report indicating they had nil disputes. Communicating to farmers that a processor has had zero reportable disputes remains an important part of the transparency which the Code is intended to provide.

More information

Dairy code of conduct

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