Law firm Addisons has advised its long-term client, Dairy Farmers Milk Co-operative (DFMC), on the successful re-authorisation of the back-to-back milk purchasing policies and pricing arrangements it has with its dairy farmer members and the Bega Group.
The back-to-back arrangements at the centre of ACCC regulatory approval support DFMC’s longstanding collective bargaining framework and allow DFMC to continue to advocate and support its dairy farmer members in supply negotiations with the Bega Group.
DFMC, an Addisons client of more than 20 years, is a farmer-run and farmer-owned supply co-operative whose core purpose is to add value and provide security to dairy farmer members through a unique milk supply relationship with the Bega Group.
Detailed submissions were made by Addisons to the ACCC’s Competition Exemptions division on DFMC’s behalf. The final determination was issued by the ACCC on 12 April 2023, with the authorisation being granted for a period of ten years. This allows DFMC to continue to give effect to the back-to-back arrangements until 31 July 2033. In its final determination, the ACCC agreed that the arrangements are likely to continue to result in a number of public benefits, including providing certainty of supply, transaction cost savings, greater farmer input into their milk supply agreements and a reduction in information asymmetry.
Addisons also advised DFMC on the original authorisation, obtained in 2008.
Special Counsel Sarah Best said, “Congratulations to DFMC and its Executive Officer, Mark Kebbell, on this wonderful, well-deserved result. As the milk pool across Australia continues to contract and competition for raw milk amongst dairy processors is at an all-time high, this result allows DFMC to continue to play an important role in representing its dairy farmer members as a trusted de-coder and trust builder across a number of milk regions in Australia.”
Mark Kebbell, Executive Officer of DFMC adds, “We are delighted with the outcome for DFMC and the benefits re-authorisation will provide to our members and the public. Thank you to Addisons for pulling the submission together in such a coherent way and making this process with the ACCC as straightforward and streamlined as possible.”