The Federal Court has found Lactalis Australia guilty of breaching the Dairy Code of Conduct as it failed to publish its milk supply agreements in line with the Code by 2pm on 1 June 2020. The Australian Competition and Consumer Commission (ACCC) which enforces the Dairy Code brought the case against Lactalis, the first under the Code. The Federal Court found Lactalis breached the Code by publishing agreements that allowed the processor to “unilaterally terminate the agreement in circumstances that did not amount to a material breach.” The Court dismissed allegations the processor failed to publish genuine non-exclusive milk supply agreements by requiring farmers to supply a minimum of 90% of their monthly supply.

ACCC deputy chair Mick Keogh said the other companies have been investigated over alleged breaches of the code in its first year of operation. However, these investigations amounted to infringement notices typically between $13,000 to $15,000 for an unlisted company and $60,000 or so for a listed company with matters resolving quickly. Keogh said Lactalis decided to go through the full contest of the alleged breaches. The ACCC has yet to decide if it will appeal the decision, but Keogh noted it was useful to have the Courts interpret the code and make determinations on what is required. Lactalis said it will carefully consider the judgement and that the company “seeks to comply with the Dairy Code at all times”.