Dairy Connect welcomes the announcement by Saputo for Mandatory Dairy Code of Conduct

Advocacy group Dairy Connect welcomes the recent announcement from Saputo Chief Executive, Lino Saputo Jr, that Australia’s largest processor will support the ACCC recommended Mandatory Code of Conduct.

The Australian Consumer and Competition Commission recommended a mandatory code to improve contracts and communications practices following a major industry review which was released in April.

Given the announcement by Mr Saputo Jr, Dairy Connect calls upon other processors to follow the leadership shown by Saputo Dairy Australia and announce their intention to support the implementation of the Mandatory Code of Conduct for the Australian dairy industry.

With this announcement, Chief Executive of Dairy Connect Shaughn Morgan said “Dairy Connect would be reaching out to Dairy Connect members to seek their views as to key points to be contained in a mandatory code. We will be doing this in the coming days.”

“Areas of concern would include transparency and certainty; dispute resolution; improving price signals; the ability to switch to new processors without penalty; written acknowledgement that all parties understood the terms of contracts,” he said.

ACCC deputy chairman Mick Keogh said a mandatory code of conduct would address problems arising from the large imbalance in bargaining power and information that exists between dairy farmers and processors.

“Currently, processors can impose milk prices and other terms of milk supply contract terms that are heavily weighted in their favour. Some milk supply contracts also contain terms that restrict farmers’ ability to change processors for a better offer.”

“These issues ultimately harm dairy production efficiency and reduce competition between processors.”