ACCC takes aim at dairy chiefs
THE consumer watchdog is taking legal action against dairy processor Murray Goulburn, alleging the co-operative misled farmers about prices it would pay for their milk before announcing a shock cut to the price in 2016 that left many farmers in hardship.
The Australian Competition and Consumer Commission has begun Federal Court proceedings against Murray Goulburn and included its former managing director Gary Helou and former CFO Bradley Hingle in the claim, alleging they were “knowingly concerned” in the conduct.
The watchdog alleges farmers relied on information from Murray Goulburn about farm gate milk prices they would receive for 2015-16, and that the co-operative maintained price forecasts despite knowing they were “overstated and unachievable”.
ACCC chairman Rod Sims said the case related to representations by Murray Goulburn to its southern region suppliers between June 2015 and February 2016, in which farmers were told milk prices would start at $5.60 a kilogram of milk solids and reach a final price of $6.05.
The regulator alleges Murray Goulburn misled farmers by saying it had a reasonable basis to set its opening and final prices at those levels when that was not the case.
“The ACCC alleges that Murray Goulburn’s conduct had an adverse impact on many farmers who, as a result of Murray Goulburn’s representations regarding the farm gate milk price, had made business decisions,” Mr Sims said.
Murray Goulburn slashed its final price to milk suppliers after a glut in the global dairy market caused a price slump.
Mr Helou, who quit his pos- ition at Goulburn in April 2016 following the price cuts and a profit downgrade, is facing possible penalties with the ACCC seeking fines, disqualification orders and costs against him and Mr Hingle.
The regulator said it would not seek fines against Murray Goulburn as the cost could be borne by the co-op’s members.
The ACCC has also decided not to take action against dairy processor Fonterra, which also cut the farmgate milk price in April 2016, saying Fonterra was more transparent about the risks and potential for a price cut.