The Australian Competition and Consumer Commission proposes to re-authorise Dairy Farmers Milk Co-operative (DFMC) to set milk purchasing policies with Dairy Farmers Pty Ltd (Lion).
DFMC is an independent farmer-owned cooperative that uses its collective milk volume, capital and membership to manage milk supply agreements. Lion is a beverage and food company, producing beer, spirits, wine, milk, cheese and fresh dairy foods.
The Milk Supply Agreement (MSA) ensures that terms for DFMC’s acquisition of milk from 600 members, are the same as terms for Lion’s acquisition of milk from DFMC.
The ACCC is proposing to re-authorise the back to back milk purchasing arrangements for ten years.
“The ACCC believes that re-authorisation of the milk supply arrangements will result in cost savings and greater certainty of supply,” ACCC Deputy Chair Dr Michael Schaper said.
“The milk supply arrangements will have limited detriments because Lion can source milk from other suppliers and DFMC farm members can still supply to third party processors or directly to Lion.”
In October 2008, the ACCC granted DFMC authorisation until 13 November 2013 for arrangements between DFMC, DFMC farm members and Australian Co-operative Foods Limited (now Lion).
Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.