The former managing director of Murray Goulburn has been fined $200,000 in the Federal Court over the dairy co-operative’s misleading claims about the milk price it expected to pay dairy farmers in 2015-16, which stoked a crisis in the industry.
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Murray Goulburn admitted it made false or misleading representations when it told farmers in Victoria, South Australia and southern New South Wales in February 2016, and until late April 2016, that it could maintain its opening farmgate milk price of $5.60 per kilogram of milk solids.
Former managing director Gary Helou also admitted he was involved in these misleading representations, which included not informing farmers of risks known to Murray Goulburn and making unfounded assumptions the co-operative could achieve its sales targets for milk powder sachets.
Australian Competition and Consumer Commission deputy chair Mick Keogh said farmers were not informed it was likely the milk price would fall below the opening price, which meant they were “denied the opportunity to plan for the impact of the reduced milk price”.
Central and northern Victorian farmers told the Bendigo Advertiser in May 2016 of their concerns and frustrations about the cut in price paid to farmers, which plummeted from $5.60 per kilogram milk solids to between $4.75 and $5 per kilogram milk solids.
Some farmers chose to sell their dairy cows in the fallout, concerned about their future in the industry.
Mr Keogh said the $200,000 penalty imposed on Mr Helou reflected his seniority and his involvement in the misleading representations about the milk price.
The ACCC did not pursue Murray Goulburn because, as a co-operative, it was possible farmers would end up paying any penalty.
“We were conscious not to seek penalty orders that would adversely affect farmers for the wrongs committed by Murray Goulburn, so we focused on obtaining appropriate orders against the individuals involved in the conduct,” Mr Keogh said.
Mr Helou has also given an undertaking to the court he will stay out of the dairy industry for three years, and he and Murray Goulburn will pay a portion of the ACCC’s legal costs.
The ACCC resolve proceedings against Murray Goulburn’s former chief financial officer Bradley Hingle after agreed to pay a contribution to the ACCC’s costs and gave an undertaking to the court that he would not be involved in the dairy industry for three years.
Murray Goulburn shut its Rochester factory in January this year, citing an effort to cut costs as being behind the decision.
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