ACCC TAKES ACTION AGAINST MURRAY GOULBURN

ACCC TAKES ACTION AGAINST MURRAY GOULBURN
THE ACCC has begun proceedings against milk processor Murray Goulburn alleging it contravened Australian Consumer Law after suddenly reducing prices last year.

The ACCC alleges Murray Goulburn engaged in unconscionable conduct and made false or misleading representations and has filed proceedings in the Federal Court.

It has also been alleged that former managing director Gary Helou and former chief financial officer Bradley Hingle were knowingly concerned in Murray Goulburn's conduct.

ACCC Chairman Rod Sims says the proceedings related to representations made between June 2015 and April 2016 about the average farmgate milk price (FMP) it expected to pay them during the 2016 financial year.

"The ACCC alleges that Murray Goulburn's conduct had an adverse impact on many farmers who, as a result of Murray Goulburn's representations regarding the farmgate milk price, had made business decisions," says Sims.

"The farmers relied on Murray Goulburn's representations and were not expecting a substantial reduction in the farmgate milk price, particularly so close to the end of the season when it was not possible for them to practically readjust their expenditure."

The ACCC alleges that Murray Goulburn, Australia's largest milk processor misled farmers by representing that it had a reasonable basis for setting and maintaining an operating FMP of $5.60 per kilogram of milk solids and a forecast Final FMP of $6.05 per kilogram.

It also alleges the company considered the forecast final FMP of $6.05 per kilogram was the most likely outcome for FY16, when that was not in fact the case.

The ACCC says Murray Goulburn's conduct was unconscionable because the company knew that farmers relied on information about the opening FMP and the forecast FMP to make significant business decisions during the financial year.

Sims says the milk processor took advantage of the vulnerable position of milk farmers.

"Many farmers are in a relatively vulnerable trading position, and rely on transparent pricing information in order to budget effectively and make informed business decisions," says Sims.

"In these circumstances, farmers were entitled to expect Murray Goulburn to have a reasonable basis for determining its pricing, and to regularly update farmers if there was any change in forecast prices."

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Facing the latest impacts of cyber-crime: cyber insurance premiums increase for businesses
Partner Content
As Australian businesses are forced to adapt to a new normal yet again, a different typ...
Aon
Advertisement

Related Stories

Zip edges into India via investment in BNPL player ZestMoney

Zip edges into India via investment in BNPL player ZestMoney

Australian buy-now pay-later (BNPL) company Zip Co (ASX: Z1P) is te...

Victoria hit with magnitude-5.8 earthquake, felt as far as Sydney and Adelaide

Victoria hit with magnitude-5.8 earthquake, felt as far as Sydney and Adelaide

A magnitude-5.8 earthquake originating in Mansfield, Victoria ...

Airwallex now valued at $5.5 billion following oversubscribed Series E

Airwallex now valued at $5.5 billion following oversubscribed Series E

Fintech platform Airwallex today announced it has raised US$200 mil...

APA throws hat in the ring with bid for AusNet, beats Brookfield's proposal by $382m

APA throws hat in the ring with bid for AusNet, beats Brookfield's proposal by $382m

The race to take control of Melbourne-based AusNet Services (ASX: A...