Warrnambool Cheese and Butter Factory (WCB) has altered its milk supply agreements with dairy farmers after the Australian Competition and Consumer Commission (ACCC) flagged that they contained potentially unfair contract terms.
These included terms that allowed WCB, which is owned by Canadian company Saputo, to unilaterally vary the milk price and other milk supply terms, with the farmer unable to terminate the milk supply agreement early without incurring a financial penalty.
WCB’s contracts also placed restrictions on farmers selling their farm and required farmers to indemnify WCB for loss which could be avoided or mitigated by WCB, according to the ACCC.
“Unfair contract terms in milk supply agreements have the potential to harm dairy farmers and their businesses,” ACCC Deputy Chair Mick Keogh said.
“WCB has worked with the ACCC to find a solution that balances the farmers’ rights under the milk supply agreements and addresses the ACCC’s concerns about potentially unfair contract terms.”
The ACCC said that the company acted promptly and agreed to take steps to address the ACCC concerns, and has written to farmers to advise them of the changes to their agreement.
WCB will also make the relevant changes to its milk supply handbook for the 2018/2019 season.
