In May 2016 the dairy giant retrospectively revised the milk prices it had set for the season with no notice for farmers.
Law firm Adley Burstyner is leading the class action, but declined to reveal the number of farmers affected in the region, what it cost them, and how much it would cost farmers to participate.
The case, which is currently underway in the Supreme Court of Victoria, alleges that Fonterra engaged in misleading and deceptive conduct, acted unconscionably and breached contracts it had with dairy farmers.
However a Fonterra spokeswoman denied all allegations, and said relationships with the farmers affected have since been repaired.
“The class action is funded by an organisation whose sole purpose is to cover the cost of litigation to gain a commercial return,” she said.
“Since then, we have completely overhauled our relationship with farmers, and we are proud of the partnerships we now have with them, our role in the industry and what we give back to our local communities.
“The ACCC investigated the 2016 milk price reduction and decided not to take any action against us.
“We deny the allegations raised in the class action and are defending the case vigorously. We remain confident of our position.”
Farmers who have been affected, and are seeking compensation, can attend an information session in mid-May and register to participate in the class action.
Mark Billing, fourth generation owner of Craiglands Partnership dairy farm in Larpent near Colac, spoke about the impact of Fonterra’s step down on his business and family.
“We had just begun calving when word came about the price change. It had been a tough summer and we’d made quite a large financial commitment to set ourselves up for the season, all based on Fonterra’s advertised price,” Mr Billing said.
“We had the rug pulled out from under us and worked out pretty quickly that we were in trouble. The next few years were a big struggle for our family personally, and also our staff who had to take on reduced work hours just so we could make it through to where we are today.”
Mr Billing was also chair of the Fonterra supply forum at the time of the May 2016 step down, a position he no longer holds.
“Individually, each of us farmers who were affected would struggle to go up against a giant like Fonterra, but there’s strength in numbers. That is why this class action is so important. I know that for my family the main thing we’re hoping to get out of this process is closure.”