Australia’s dairy code of conduct launched

A new dairy code of conduct on trading agreements between farmers and the milk processors in Australia was introduced as of 1 January. Australia’s Dairy Industry Code of Conduct (the code) aims to improve the clarity and transparency of trading arrangements between dairy farmers and those buying their milk, according to the Australian Competition and Consumer Commission. Dairy farmers and processors must comply with the code. Some sections of the code do not apply when a processor is a small business entity or a dairy farmer is dealing with a processor that is a small business entity.

The new code applies to retailers, such as supermarkets, only to the extent that they purchase milk directly from farmers. The relationship between retailers and processors may also be covered by the Food and Grocery Code of Conduct.

Some sections of the code will not apply to either a farmer or processor if a processor is a small business entity. However, all processors and farmers, regardless of size, must at all times deal with each other in good faith.
A small business entity includes a business that had an annual aggregated turnover of less than A$10 million in the previous financial year.

It does not apply to dairy farmers and processors with a milk supply agreement that was entered into before 1 January 2020, unless that contract is varied or renewed.
All contracts, no matter when they were entered into, must be compliant with the code from 1 January 2021.
The ACCC is responsible for enforcement of the code and investigates alleged breaches.

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