The former boss of one-time dairy giant Murray Goulburn has copped $200,000 in penalties after admitting the company lied about a likely payment to farmers for the 2016 season.
The Australian Competition and Consumer Commission (ACCC) on Thursday released a statement saying former Murray Goulburn managing director Gary Helou had agreed to pay $200,000 after admitting he was knowingly involved in the company's "false or misleading claims about the farmgate milk price it expected to pay dairy farmers during the 2015-16 milk season".
The maximum penalty for an individual under the Australian Consumer Law is $220,000 per contravention while companies can face up to $1.1 million per contravention.
Related reading MG to settle court case with ACCC Murray Goulburn’s $650,000 penalty confirmed MG settles for $650,000 with ASIC over profit cut
The ACCC chose not to pursue a penalty against Murray Goulburn because, as a co-operative, the farmers who were harmed by the conduct would have ended up paying the fine.
“The penalty imposed against Mr Helou reflects his seniority at Murray Goulburn and involvement in misleading representations about the farmgate milk price,” ACCC deputy chairman Mick Keogh said.
“We were conscious not to seek penalty orders that would adversely affect farmers for the wrongs committed by Murray Goulburn, so we focused on obtaining appropriate orders against the individuals involved in the conduct."
Murray Goulburn has paid a $650,000 penalty after admitting it breached continuous disclosure obligations in a court case brought by the Australian Securities and Investments Commission (ASIC).
The company, which was bought by Canada's Saputo earlier this year, still faces the prospect of class actions.
In the ACCC case, Murray Goulburn admitted falsely telling farmers in Victoria, South Australia and southern NSW through the early part of 2016 that it could maintain the opening milk price of $5.60 per kg of milk solids.
“Murray Goulburn’s misrepresentations meant farmers were not informed of the likelihood the final milk price would fall below the opening price. This was important information for farmers as it would have influenced the business decisions each farmer made,” Mr Keogh said.
“Farmers were denied the opportunity to plan for the impact of the reduced milk price on their businesses between February and April 2016, including implementing measures to reduce their exposure to a decrease in the milk price or shopping their milk around to other dairy processors.”
Mr Helou has given an undertaking to the court that he will not be involved in the dairy industry for three years.
In August, Murray Goulburn’s former chief financial officer, Bradley Hingle, agreed to pay the ACCC's costs and also gave an undertaking he would not be involved in the dairy industry for three years.