OPINION: When Australia’s largest dairy processor and farmer co-operative Murray Goulburn announced in April 2016 that it was slashing the farmgate milk price in an attempt to claw back $183 million it had already paid to suppliers, the dairy industry was plunged into a deep crisis.
Farmers were rightly outraged that the industry became paralysed by events that were seemingly preventable.
The Australian Competition and Consumer Commission (ACCC) took action against the processor in the Federal Court for making false or misleading representations to farmers that it could maintain its opening milk price of $5.60 a kilogram milk solids and a forecast final milk price of $6.05/kg MS when in fact this was not sustainable.
But while Murray Goulburn admitted to this breach of the Australian Consumer Law, which at the time carried a maximum fine of $1.1 million, the ACCC elected not to pursue a financial penalty because as a farmer co-operative, any penalty would likely end up being paid by the very people who were hurt by the company’s actions in 2016.
