Mandatory dairy code of conduct

On 15 March 2019, the Liberal and Nationals Government announced that it will progress a mandatory dairy code of conduct.

We are now seeking your feedback on:

  1. the exposure draft of the mandatory dairy code of conduct; and
  2. milk pricing and trading concepts

You may wish to provide feedback on one or both topics.

Share your feedback on the exposure draft

To have your say:

Please provide your feedback by 2.00pm AEDT on 22 November 2019.

Principles of the code of conduct

The code will cover nine principles to increase fairness and transparency between dairy farmers and processors:

  1. require parties to deal with each other in good faith and to operate with fair dealing by having due regard to the other party’s legitimate business interests
  2. prevent unilateral changes to agreements
  3. require that annually on a set date processors publicly release a standard form agreement covering the terms of supply and a price (and if applicable a pricing mechanism for longer-term agreements) that covers the term of the agreement
  4. prevent retrospective price step downs
  5. prohibit prospective step downs unless in specific circumstances such as force majeure, or exceptional market circumstances or major changes in global market conditions
  6. prohibit exclusive supply arrangements in combination with two-tier pricing
  7. prohibit processors withholding loyalty payments if a farmer switches processors
  8. introduce a dispute resolution process for matters related to contracts between farmers and processors, and
  9. alleged breaches of the code, to be investigated by the Australian Competition and Consumer Commission, which may include penalties for breaches of the code.

Milk pricing and trading concepts

A range of alternative approaches to how farmers sell their milk have been developed and proposed for use within the dairy industry. The government is interested to hear the industry’s views and whether there is a preference for a particular approach.

The Government has committed $560,000 to the Australian Dairy Farmers (ADF), the representative industry group for dairy farmers in Australia, to design, develop and market test new milk pricing and trading concepts. We will provide the initial thoughts raised during this consultation to ADF to inform this work.

While there are different approaches to how alternative milk pricing and trading concepts could work, all are aimed at supporting farmers to have a greater role in managing the sale of their milk. Some of the proposed approaches are based on those used in other commodities such as the wool and grain industries, which have changed how milk is sold and traded among farmers and processors. Others are based on approaches used in the dairy industries of other countries. These approaches include the mandatory collection and publication of the price and volume of milk that has been paid to farmers by processors in the previous month, or exchange platforms to connect farmers with processors.

The dairy industry is encouraged to provide feedback on alternative approaches, including particular factors that are more valued.

Share your feedback on milk pricing and trading concepts

To have your say:

Please provide your feedback by 2.00pm AEDT on 22 November 2019.

Previous consultations

We sought your feedback on draft clauses for a dairy code and potential regulatory impacts of a code over two consultation rounds. The first round of consultation opened on 31 October 2018 and closed on 28 November 2018. The second round of consultation opened on 15 January 2019 and closed on 15 February 2019.

We gathered your ideas through:

  • 18 public consultation meetings held in all dairy regions
  • one-on-one meetings with over 20 processors and industry representative bodies
  • two tele-town hall sessions
  • phone calls and emails from dairy farmers and other industry members.

On 15 March 2019, the Liberal and Nationals Government announced that it will progress a mandatory dairy code of conduct.

We are now seeking your feedback on:

  1. the exposure draft of the mandatory dairy code of conduct; and
  2. milk pricing and trading concepts

You may wish to provide feedback on one or both topics.

Share your feedback on the exposure draft

To have your say:

Please provide your feedback by 2.00pm AEDT on 22 November 2019.

Principles of the code of conduct

The code will cover nine principles to increase fairness and transparency between dairy farmers and processors:

  1. require parties to deal with each other in good faith and to operate with fair dealing by having due regard to the other party’s legitimate business interests
  2. prevent unilateral changes to agreements
  3. require that annually on a set date processors publicly release a standard form agreement covering the terms of supply and a price (and if applicable a pricing mechanism for longer-term agreements) that covers the term of the agreement
  4. prevent retrospective price step downs
  5. prohibit prospective step downs unless in specific circumstances such as force majeure, or exceptional market circumstances or major changes in global market conditions
  6. prohibit exclusive supply arrangements in combination with two-tier pricing
  7. prohibit processors withholding loyalty payments if a farmer switches processors
  8. introduce a dispute resolution process for matters related to contracts between farmers and processors, and
  9. alleged breaches of the code, to be investigated by the Australian Competition and Consumer Commission, which may include penalties for breaches of the code.

Milk pricing and trading concepts

A range of alternative approaches to how farmers sell their milk have been developed and proposed for use within the dairy industry. The government is interested to hear the industry’s views and whether there is a preference for a particular approach.

The Government has committed $560,000 to the Australian Dairy Farmers (ADF), the representative industry group for dairy farmers in Australia, to design, develop and market test new milk pricing and trading concepts. We will provide the initial thoughts raised during this consultation to ADF to inform this work.

While there are different approaches to how alternative milk pricing and trading concepts could work, all are aimed at supporting farmers to have a greater role in managing the sale of their milk. Some of the proposed approaches are based on those used in other commodities such as the wool and grain industries, which have changed how milk is sold and traded among farmers and processors. Others are based on approaches used in the dairy industries of other countries. These approaches include the mandatory collection and publication of the price and volume of milk that has been paid to farmers by processors in the previous month, or exchange platforms to connect farmers with processors.

The dairy industry is encouraged to provide feedback on alternative approaches, including particular factors that are more valued.

Share your feedback on milk pricing and trading concepts

To have your say:

Please provide your feedback by 2.00pm AEDT on 22 November 2019.

Previous consultations

We sought your feedback on draft clauses for a dairy code and potential regulatory impacts of a code over two consultation rounds. The first round of consultation opened on 31 October 2018 and closed on 28 November 2018. The second round of consultation opened on 15 January 2019 and closed on 15 February 2019.

We gathered your ideas through:

  • 18 public consultation meetings held in all dairy regions
  • one-on-one meetings with over 20 processors and industry representative bodies
  • two tele-town hall sessions
  • phone calls and emails from dairy farmers and other industry members.
  • Third round of consultation

    12 days ago
    Tele-town hall Thursday, 14 November 2019
    7:00 - 8:00pm (AEDT)


    Online registrations for the tele-town hall have now closed.

    If you still wish to join the tele-town hall, please call (02) 8488 0925 ext. 52467 between 7-8pm (AEDT) to be connected to the meeting.

    How a tele-town hall works

    A tele-town hall allows many participants to be connected via telephone to join a presentation and discussion.

    On the day of the tele-town hall, you will receive a phone call on the number you provided asking you...

    Tele-town hall Thursday, 14 November 2019
    7:00 - 8:00pm (AEDT)


    Online registrations for the tele-town hall have now closed.

    If you still wish to join the tele-town hall, please call (02) 8488 0925 ext. 52467 between 7-8pm (AEDT) to be connected to the meeting.

    How a tele-town hall works

    A tele-town hall allows many participants to be connected via telephone to join a presentation and discussion.

    On the day of the tele-town hall, you will receive a phone call on the number you provided asking you to join the tele-town hall event. This will happen close to the start time. This call is toll free and you will not be charged to participate in the tele-town hall meeting.

    As a tele-town hall participant you will have the opportunity to ask questions about the dairy code. A moderator will select questions to be addressed by the speaker.

    If you have registered for the tele-town hall but do not receive a call at the scheduled time, please call (02) 8488 0925 ext. 52467 to be connected to the meeting.

    If you have any questions about the tele-town hall or registration process please contact the dairy code team at 1300 044 940 or email dairycode@agriculture.gov.au.

    Privacy Notice

    Personal information means information or an opinion about an identified individual, or an individual who is reasonably identifiable.

    By registering to be part of the department’s tele-town hall you will be required to provide your personal information, including your name and telephone number. As facilitator of the teleconference, the department will have access to your personal information and may use your personal information to contact you.

    The department will not disclose your personal information outside of the department. If your personal information is used, it will used and stored in accordance with the Australian Privacy Principles.

    Please note that the teleconference will be recorded. If you identify yourself during the teleconference, the department will collect your personal information.

    See the department's Privacy Policy to learn more about accessing or correcting personal information or making a complaint. Alternatively, telephone the department on +61 2 6272 3933.

  • Second round of consultation

    8 months ago
    Date Location Region
    29 January 2019 Warragul, VIC GippsDairy
    31 January 2019 Echuca, VIC Murray Dairy
    1 February 2019 Warrnambool, VIC WestVic Dairy
    6 February 2019 Tele-town hall
    7 February 2019 Tele-town hall
    Date Location Region
    29 January 2019 Warragul, VIC GippsDairy
    31 January 2019 Echuca, VIC Murray Dairy
    1 February 2019 Warrnambool, VIC WestVic Dairy
    6 February 2019 Tele-town hall
    7 February 2019 Tele-town hall
  • First round of consultation

    about 1 year ago
    Date Location Region
    8 November 2018 Devonport, TAS DairyTas
    13 November 2018 Mt Gambier, SA DairySA
    14 November 2018 Adelaide Hills, SA DairySA
    15 November 2018 Brunswick, WA Western Dairy
    15 November 2018 Margaret River, WA Western Dairy
    19 November 2018 Bega, NSW DairyNSW
    20 November 2018 Nowra, NSW DairyNSW
    20 November 2018 Lismore, NSW Subtropical
    21 November 2018 Wauchope, NSW DairyNSW
    21 November 2018 Gympie, QLD Subtropical
    22 November 2018 Boonah, QLD Subtropical
    26 November 2018 Camperdown, VIC WestVic Dairy
    26 November 2018 Malanda, QLD Subtropical
    27 November 2018 Shepparton, VIC Murray Dairy
    28 November 2018 Maffra, VIC GippsDairy
    Date Location Region
    8 November 2018 Devonport, TAS DairyTas
    13 November 2018 Mt Gambier, SA DairySA
    14 November 2018 Adelaide Hills, SA DairySA
    15 November 2018 Brunswick, WA Western Dairy
    15 November 2018 Margaret River, WA Western Dairy
    19 November 2018 Bega, NSW DairyNSW
    20 November 2018 Nowra, NSW DairyNSW
    20 November 2018 Lismore, NSW Subtropical
    21 November 2018 Wauchope, NSW DairyNSW
    21 November 2018 Gympie, QLD Subtropical
    22 November 2018 Boonah, QLD Subtropical
    26 November 2018 Camperdown, VIC WestVic Dairy
    26 November 2018 Malanda, QLD Subtropical
    27 November 2018 Shepparton, VIC Murray Dairy
    28 November 2018 Maffra, VIC GippsDairy