Dairy War Erupts! ACM Sues Fonterra Over Milk Contracts

The Australian dairy industry is experiencing a significant legal clash as Australian Consolidated Milk (ACM) has filed a lawsuit against Fonterra, alleging interference in farmer contracts. ACM claims that Fonterra has actively enticed farmers to break exclusive milk supply agreements by proposing more lucrative farmgate prices. This dispute, currently being fought in the Supreme Court of Victoria, highlights the fierce competition within the dairy sector and brings to light the necessity for reform in the dairy code of conduct.

The legal challenge was prompted by reports of a Fonterra employee allegedly approaching Victorian dairy farmers bound by contracts with ACM and offering detailed comparative insights into ACM’s and Fonterra’s contracts, despite confidentiality clauses in place. These actions have prompted ACM to seek an injunction, asserting that their priority is to protect the valuable relationships they have established with their milk suppliers.

Fonterra, on their part, has denied the allegations of contractual interference. They insist that no attempts were made to disrupt existing agreements. The case has drawn attention to broader issues facing the dairy industry, particularly concerning the federal government’s mandatory dairy code of conduct. Industry leaders, including Australian Dairy Farmers president Ben Bennett, have called for reforms, particularly in pricing practices, as the situation underscores the pressing need for transparent and fair regulation in milk procurement.