A mandatory code of conduct between dairy processors and suppliers is the key recommendation in the Australian Competition and Consumer Commission’s final dairy inquiry report.
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The report, released on Monday, said a mandatory code would address problems arising from the large imbalance in bargaining power.
“Contracting and industry practices are weighted heavily in favour of processors. This has led to inappropriate allocation of risk, increased potential for inefficient investment decisions by farmers and less effective competition between processors,” the report said.
Existing Competition and Consumer Act provisions, the dairy industry’s voluntary code of conduct and a prescribed voluntary code were considered “inadequate”.
Australian Dairy Farmers president Terry Richardson commended the commission’s recommendation to establish and independent mediator.
“It is vital that we have a mechanism to ensure farmers are protected in any disputes,” he said.
Johanna Baker-Dowdell
Johanna has more than 22 years experience as a journalist for newspapers, magazines and online publications.
Johanna has more than 22 years experience as a journalist for newspapers, magazines and online publications.
