Dairy advocate tells ACCC to keep industry relations simple

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Responding to the Australian Competition and Consumer Commission’s (ACCC) interim dairy industry review, advocacy group Dairy Connect has called for simplified, single document contracts between dairy processors and producers.

The ACCC invited responses from industry stakeholders and the community following the release of the regulator’s interim findings on changes needed in dairy industry relationships and behaviours late last year.

Dairy Connect CEO Shaughn Morgan said the organisation had responded to the eight strong recommendations from the ACCC that were contained in their interim report.

He said that it was critical that industry now embraced changes designed to underpin and grow dairy’s contribution to regional economies and to the national economy.

“We submitted that this was a ‘once in a generation’ opportunity for positive collective change to occur,” he said.

Dairy Connect Farmers Group President, Graham Forbes said the dairy industry has been under sustained pressure during the past 10 years and it is evident that systemic and fundamental change was required to underpin dairy’s future.

“In the submission, we supported the development of a commodity milk price index, a federal government initiative announced last year by the Deputy Prime Minister Barnaby Joyce and which is currently awaiting further development, this should be progressed without delay” Forbes said.

“We strongly indicated that mechanisms that will help producers make informed decisions regarding farm-gate pricing should be strongly supported by industry players and governments.”

The Dairy Connect submission recommended to the ACCC that processor / supplier contracts should not prevent suppliers from switching processors to optimise farm-gate income.

Other recommendations included independent dispute mediation; full consideration by farmers of contracts they plan to enter; and processors should make available improved price information.

Dairy Connect argued that while the existing voluntary code of conduct should be strengthened in the short term, the ACCC should ‘seriously consider’ a mandatory code of conduct governing processor / supplier relationships and behaviours.

Shaughn Morgan said the dairy industry has been under sustained pressure during the past years and it is evident that systemic and fundamental change was required to underpin dairy’s future.

“Over the years, there have been many reviews of the dairy industry, but the current ACCC activity can work as a mechanism to provide guidance and direction as well as providing an opportunity for stakeholders to embrace change,” he said.

“Failure to change may result in the decline of the dairy industry’s importance to Australia’s regional and national economies.”