The Australian Competition and Consumer Commission (ACCC) has announced that it is monitoring the introduction of the new mandatory dairy code of conduct, which requires processors to buy milk from farmers using compliant milk supply agreements.

Implemented on 1 January, the dairy code is applicable to dairy processors and farmers.

ACCC deputy chair Mick Keogh said: “The new code is designed to address a significant imbalance in bargaining power between processors and farmers.

“Milk supply agreements offered by dairy processors must meet certain minimum standards, like including cooling-off periods for farmers while not containing contract terms that were previously used to push risk onto farmers.

“Dairy farmers now have more information than ever to help them make a choice of processor well ahead of the start of the new season.”

ACCC also noted that the agreements must include a minimum milk price, among other conditions.

Through this initiative, ACCC will check dairy processors’ compliance with the code and take enforcement action where appropriate.

Since 1 June, ACCC has accessed more than 100 published milk supply agreements and identified that most of the milk processors published at least one milk supply agreement by the deadline.

The competition authority is undertaking a detailed review of compliance to ensure the terms of milk supply agreements comply with the code.

Keogh added: “We are actively engaging with farmers and processors and closely watching adherence to the code so it can deliver the intended benefits to farmers and the whole industry. We note that some processors have voluntarily changed their approach after being contacted by the ACCC regarding code compliance issues.”

In April, ACCC conditionally approved the proposal by Japanese beer and spirits producer Asahi Group Holdings to acquire Carlton & United Breweries (CUB).