Brownes, Lion Dairy and Drinks, and Parmalat/Harvey Fresh are among the WA companies to amend specific terms in their milk supply agreements, addressing the Australian Competition and Consumer Commission’s concerns that some terms were unfair to farmers.
Other processors to agree included Norco and Fonterra.
The ACCC has worked with dairy processors over the past year to ensure that terms in the contracts they offer farmers comply with business-to-business laws that came into force in November 2016.
The commission’s work focused on terms in milk supply contracts that had the potential to cause the greatest harm to farmers.
Most processors agreed to provide dairy farmers with the right to terminate contracts if the processor varies supply terms such as price or quality requirements that place the farmer in a worse financial position.
The ACCC also raised concerns with some processors about lengthy notice periods for farmers to terminate contracts, one-sided termination rights, broad indemnities, and terms that restrict a farmer’s ability to lease a farm or sell their cattle.
ACCC deputy chairman Mick Keogh said the commission worked with each processor individually to ensure amendments did not disadvantage farmers.
WA Farmers dairy section president Michael Partridge said moves towards fairer arrangements were welcome given a mandatory code of conduct would not be implemented for another 18 months.
