ADIC sticks to its guns with review of voluntary code

By Dairy News

A SCHEDULED review of the dairy industry’s voluntary code of practice, adopted last July by the Australian Dairy Industry Council (ADIC) and signed by a majority of processors, will proceed despite industry demands for a mandatory code to be adopted.

The ADIC (the umbrella body of Australian Dairy Farmers and processors) launched the voluntary code last July. The code sets guidelines regarding pricing structures, loyalty payments and dispute resolution, and applies to contracts between farmer and processor.

State farmer bodies from all dairy states are also signatories to the code.

However, the competition and consumer watchdog, the ACCC, said a mandatory code of conduct should be implemented as part of its recommendations from its 18-month review of the dairy industry.

Most State farmer bodies have now called for a mandatory code to be adopted.

However, ADIC Chairman Terry Richardson has said it committed at the launch of the code to undertake a review of its effectiveness after a 12-month period and that this decision would stand.

“ADIC is conducting a scheduled review of the Voluntary Code of Practice, which was agreed to by all state dairy farmer organisations,” Mr Richardson said.

It is expected the review will be complete by the end of June.

Australian Dairy Farmers (ADF) will then hold a series of forums aimed at educating farmers on how the ADIC recommendations will be implemented.

“The review will determine how effective the Voluntary Code has been and whether it is necessary to adopt a different approach. This could be a prescribed voluntary code, mandatory code or another mechanism altogether. Nothing is off the table,” Mr Richardson said.

As part of the process, the ADIC will analyse separate reports handed down by the Australian Competition and Consumer Commission (ACCC) and the federal Senate’s Economics Reference Committee (ERC).

The final ADIC report will include options to improve contract processes, increase price transparency, build industry capability and bolster the Code of Practice.

Mr Richardson said the review would involve stakeholders across the dairy supply chain to ensure the best outcome.

“The Code of Practice is a vital part of restoring relationships across industry,” he said.

“We want to ensure we get the Code right and the review process is the best way to achieve that outcome.

“At this stage it would be wrong to pre-empt the outcome of the review.