On 25 January 2023, Dairy Farmers Milk Co-operative Ltd (the Co-operative) on behalf of itself, its member farmers and Dairy Farmers Pty Ltd (Bega) lodged an application for re-authorisation. The application relates to the back- to-back arrangements with regard to milk purchasing policies and pricing arrangements. The ACCC previously authorised these back-to-back arrangements in 2008 and 2013.
Broadly, the Co-operative sought authorisation to give effect to back-to-back arrangements, as set out in certain clauses in the Milk Aggregation Supply Agreement between the Co-operative and Bega. The back-to-back arrangements provide that:
- the Co-operative must adopt the same milk purchasing policy (including price structure) in relation to its acquisition of milk from Co-operative members as Bega applies to its purchase of milk from the Co-operative (clause 4.4)
- the Co-operative must sell the milk it acquires from the Co-operative members to Bega on the same terms and conditions relating to payment, pricing, collection and quality as contained in its milk supply agreements with the Co-operative members (clause 4.5.2)
- the Co-operative must adopt the same milk price in relation to the purchase of milk by the Co-operative from Co-operative members as the Co-operative receives from Bega for the milk it sells to Bega (clause 5.6).
The Co-operative sought authorisation for 10 years until July 2033.
On 12 April 2023, the ACCC issued a final determination granting authorisation for a period of 10 years, until 31 July 2033.
The copy of the ACCC’s final determination is below.
