WCB’s agreements 'potentially unfair'

02 Jul, 2018 03:03 PM
Comments
0
 
The Saputo-owned Warrnambool Cheese and Butter has altered its milk supply agreements with farmers after they were found to be
Unfair contract terms in milk supply agreements have the potential to harm dairyfarmers.
The Saputo-owned Warrnambool Cheese and Butter has altered its milk supply agreements with farmers after they were found to be "potentially unfair."

The Saputo-owned Warrnambool Cheese and Butter (WCB) has altered the terms of its milk supply agreements with farmers after the Australian Consumer and Competition Commission (ACCC) found them “potentially unfair.”

The ACCC said WCB’s contracts with farmers contained terms that allowed it to unilaterally vary the milk price and other milk supply terms, with the farmer unable to terminate the milk supply agreement early without incurring a financial penalty.

WCB’s contracts also placed restrictions on farmers selling their farm and required farmers to indemnify WCB for loss that could be avoided or mitigated by WCB.

The ACCC said WCB acted promptly and agreed to take steps to address its concerns.

WCB had said it would not impose a penalty on any farmer who terminated their milk supply agreement before the expiration date, that it would not unreasonably withhold consent from a farmer wishing to sell their farm, and it would narrow the scope of the indemnity required from farmers, the ACCC said.

“Unfair contract terms in milk supply agreements have the potential to harm dairyfarmers and their businesses,” ACCC deputy chair Mick Keogh said.

“WCB has worked with the ACCC to find a solution that balances the farmers’ rights under the milk supply agreements and addresses the ACCC’s concerns about potentially unfair contract terms.”

Saputo said the ACCC had identified 21 milk suppliers who were potentially impacted by its concerns.

“While WCB did not think the operation of the Milk Supply Agreements has been unfair, and no milk suppliers had raised any concerns over the alleged unfair terms, WCB co-operated fully with the ACCC by offering a series of measures, which have been accepted by the ACCC and fully address its concerns," it said.

“To further support its milk suppliers, WCB also extended these measures to another 80 suppliers, who were not directly impacted by the ACCC’s concerns.

“WCB highly values its milk suppliers and considers these relationships as essential to the success of its business.”

The Canadian-based Saputo became Australia’s largest dairy processor when it added the Murray Goulburn (MG) group of dairy factories in May to the WCB factory it acquired in 2014.

Saputo is currently in the process of selling off MG’s Koroit factory because of the ACCC’s concerns that it would have too much control of the regional milk market if it owned both WCB and the MG Koroit factory.

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 
A new definition of 'genetically modified' currently awaiting parliamentary approval could see a swathe of new grasses on the market within three years.
13 Nov 18 A new definition of "genetically modified" currently awaiting parliamentary approval could see a swathe of new...
A person normally breathes about 25,000 times a day, with the lungs taking in oxygen from the air and delivering it to the bloodstream.02 Nov 18 A person normally breathes about 25,000 times a day, with the lungs taking in oxygen from the air and delivering it...
light grey arrow
Olivia - what you fail to consider is that animals fed the crops you speak of aren't evolved to
light grey arrow
If that’s what they think the milk volume drop will be they are in for one hell of a shock. 200
light grey arrow
A well planned vegan diet is certainly not nutrient deficient. But aside from that, the entire
Amidst rising farm costs, Dairy Australia has developed a range of energy information resources to assist farmers to make smarter use of energy to reduce power bills.
13 Nov 18 Amidst rising farm costs, Dairy Australia has developed a range of energy information resources to assist farmers to...
Accurate and up-to-date paperwork is crucial for all dairy farmers. But as a farm manager, Allen Hook says the ability to keep precise records is what keeps him in a job.12 Nov 18 Accurate and up-to-date paperwork is crucial for all dairy farmers. But as a farm manager, Allen Hook says the...
Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition opportunities.25 Sep 16 Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition...
Monopoly market may confront cropping sector under mega-merger proposal.22 Sep 16 Monopoly market may confront cropping sector under mega-merger proposal.