It would later become the catalyst for an Australian Competition and Consumer Commission inquiry into the dairy industry, with a report finding:
"These step-downs caused severe and unforeseen reductions in the incomes of more than 2,000 dairy farmers and significantly impacted the productivity of the industry." Almost a year later, in 2017, milk processor Murray Goulburn and subsequently its competitor, Fonterra, reversed the price drop for 2015-16 year and paid back farmers across the country.But TLC is claiming that money actually belongs to it and that in "failing" or "refusing" to pay TLC the money, VDG has breached the sale of agreement.
The documents allege VDG has "received and retained that amount for [its] own use" which would mean it was "unjustly enriched and … inequitable".In the Supreme Court, lawyer for TLC Chris Gunson described the contracts between milk processors and suppliers that allow for such fluctuations as "fundamentally unfair to farmers".
He noted that while a company the size of TLC might be able to deal with that kind of cost, retrospective price drops could have drastic consequences — particularly for those who might have spent the money.The 2018 ACCC inquiry into the industry found that "the processors have an unfair ability to change key trading terms, including price" and recommended introducing a mandatory code of conduct.
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