29 Apr 2017

Farmers rejoice at Murray Goulburn legal action

9:10 am on 29 April 2017

A New Zealand dairy farmer in Australia is eager to see that country's biggest milk processor exposed in court.

One of Jared Watson's dairy cows.

Dairy cows (file photo) Photo: RNZ / Alexa Cook

The Australian Competition and Consumer Commission is prosecuting the Murray Goulburn company and two of its former top executives, accusing them of misleading farmers last year by overstating the milk price.

The company then slashed farm gate prices, and forced farmers to pay back money they had already received.

The decision left many farmers individually owing Murray Goulburn more than $100,000 and sparked a crisis in the sector.

Vikki Lequesne who farms in Strathmerton, northern Victoria, was delighted at the charges against Murray Goulburn.

"They seriously misled their farmers," she said.

We all bought hay, fodder, water, at a hugely ridiculous price, had the price slashed underneath us.

"And then they say that they're going to claw back the money that they paid us."

The competition commission is not seeking to fine the cooperative, saying that would only hurt farmers, but the former managing director and chief financial officer could be fined.

The ACCC alleged former managing director Gary Helou and former chief financial officer Bradley Hingle "were knowingly concerned in Murray Goulburn's conduct".

ACCC chairman Rod Sims said they could face penalties up to $AU220,000 per breach.

"I don't want to pre-empt the court proceedings. There could be multiple contraventions here and each contravention would have a penalty of up to $220,000 per breach."

Fonterra avoids prosecution

New Zealand dairy giant Fonterra follows Murray Goulburn's lead on payouts in Australia, but it is not being prosecuted.

The ACCC also investigated the conduct of fellow milk processor Fonterra, which also slashed prices paid to farmers, but announced it would not take further action against the company.

Lobby group Australian Dairy Farmers said while it welcomed the proceedings against Murray Goulburn it was surprised the ACCC was not pursuing Fonterra.

"We acknowledge the ACCC is an independent regulator and after applying the law has concluded that they were more transparent in their activities," a statement issued by Australian Dairy Farmers read.

Fonterra issued a statement saying the past 12 months had been incredibly challenging for Australian dairy farmers and the broader dairy industry.

- RNZ / ABC

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