Lactalis, a major dairy processor in Australia, has been fined A$950,000 ($644,000) for breaching Australia’s dairy code of conduct during the 2020-21 milk season.
The French-owned company faced legal action by the Australian Competition and Consumer Commission (ACCC) in July 2021 for alleged breaches to the Dairy Code of Conduct.
In September 2022, the ACCC ruled that Lactalis had indeed breached the code when it failed to publish milk-supply agreements on its website by the specified deadline of 2pm on 1 June 2020.
Another breach was identified regarding Lactalis “publishing and entering into agreements that allowed them to unilaterally terminate the agreement in circumstances that did not amount to a material breach,” as stated by the ACCC.
Specifically, Lactalis was permitted to terminate the agreement unilaterally based on its opinion of a farmer engaging in “public denigration” of processors, key customers, or other stakeholders.
The Australian federal court found no evidence of actual harm resulting from that specific agreement term but recognized its potential “chilling effect on the farmers who were subject to it.”
ACCC deputy chair Mick Keogh emphasized the importance of taking action against Lactalis to maintain transparency in the industry and address systemic imbalances in bargaining power between processors and farmers.
Keogh stated, “The code was introduced to help dairy farmers make informed choices about where they sell their milk by ensuring there is transparency in pricing agreements and by allowing them to compare agreements from different processors in a timely fashion.”
Furthermore, Keogh confirmed that processors who fail to comply with the code may face significant penalties as part of the ACCC’s commitment to protecting small businesses under industry codes.
Lactalis, which purchases milk from over 400 dairy farmers across Australia, is a major player in the country’s dairy industry. The company produces various dairy products under popular brands such as Pauls, Oak, Vaalia, and Ice Break.
Recently, Italy’s principal farmers’ association, Coldiretti, accused Lactalis of “unfair” trading practices in milk procurement. Lactalis has counterclaimed the accusations as “unjust.”
