Buyer be­ware as MG car­ries court ac­tion

Tasmanian Country - - NEWS -

AN out­right buyer of Mur­ray Goul­burn is likely to in­herit a “poi­son chal­ice”, with court ac­tion be­ing taken against the dairy pro­ces­sor by the Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion.

It is un­der­stood the re­spon­si­bil­ity for de­fend­ing MG in the Fed­eral Court for mak­ing mis­lead­ing and de­cep­tive rep­re­sen­ta­tions and con­tra­ven­ing Aus­tralian con­sumer law will trans­fer to a new buyer if it ac­quires the co-op­er­a­tive as a whole.

How­ever, it is un­clear what hap­pens if MG is sold in parts.

The ACCC said it had no com­ment as its case against MG was be­fore the courts.

MG has de­nied mak­ing mis­lead­ing or de­cep­tive rep­re­sen­ta­tions in set­ting the 2015-16 far­m­gate milk price or break­ing con­sumer law. The ACCC had made ac­cu­sa­tions against MG, its for­mer man­ag­ing direc­tor Gary Helou and for­mer chief fi­nan­cial of­fi­cer Brad Hin­gle in a state­ment of claim in July.

Mr Helou and Mr Hin­gle have filed their de­fences, deny­ing false, mis­lead­ing or de­cep­tive rep­re­sen­ta­tions or be­ing in­volved in con­tra­ven­tions of Aus­tralian con­sumer law.

In its state­ment of claim, the ACCC said MG an­nounced a sea­son open­ing price as early as May 2015, based on a fi­nal far­m­gate milk price of $6.05 a kilo­gram of milk solids.

It al­leged MG kept mak­ing milk pay­ments based on a fi­nal far­m­gate price of $6.05/kgMS right through un­til April last year de­spite know­ing the pay­ment was un­achiev­able just two months ear­lier.

Mr Hin­gle said milk prices were “ul­ti­mately a mat­ter for de­ter­mi­na­tion by the (MG) board or a sub-com­mit­tee del­e­gated by the board”.

The ACCC al­leged dairy farm­ers sup­ply­ing MG re­lied on the “mis­lead­ing” state­ments on the open­ing and fi­nal milk prices to make busi­ness de­ci­sions and were ex­posed to “risk of fi­nan­cial harm”.

A pre-trial case man­age­ment con­fer­ence will be held in the Fed­eral Court on Fri­day. No trial date has been set. This week me­dia re­ports sug­gested Fuyang Farm­ing was the lat­est Chi­nese party weigh­ing a bid for MG.

An­other com­pany re­port­edly in­ter­ested is China Re­sources, which al­ready owns a stake in the com­pany.

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