Milk processing giant Fonterra is expected to pay out $25 million in a class action launched by dairy farmers over its price drop in 2016.
The settlement, on November 3, came only a few weeks before the class action was expected to hit the courts.
Suppliers launched the action for financial compensation over retrospective price drops for the farmers who supplied Fonterra in May and June 2016.
The plaintiffs claimed misleading and deceptive conduct, but in the settlement, Fonterra has not admitted any liability and the company said it wanted to see the matter settled so all parties could move on.
Lead lawyer in the case, David Burstyner, said he had been receiving positive emails and text messages from farmers one after the other since the news of the settlement came through.
“They get a nice bit of news before Christmas and, with court approval targeted for (the first quarter) next year, a nice payout in 2023,” Mr Burstyner said.
“It was an intense court process to get here — Fonterra fought hard and we fought hard for farmers.
“We looked at 55,000 documents (using a team of around 30 legal staff at one point) and prepared many detailed witness and expert statements.
“We were fired up for a trial next month, and thought our case had some really good points.
“But anything can happen at trial, and then there can be appeals that can take months, if not years to resolve, and this settlement avoids all that.”
Fonterra Australia managing director Rene Dedoncker said the company had, during the past six years, invested a significant amount of time and effort to overhaul their relationship with farmers to rebuild trust and strengthen the dairy industry.
“We are proud of the good relationships we have today with our farmers and the wider industry and are committed to investing in the future of Australian dairy for years to come,” Mr Dedoncker said.
“The settlement sum of $25 million, inclusive of interest and all costs, has already been provided for in the prior year’s financial statements and will not have a material impact on Fonterra Co-operative Group Limited’s financial position.”
Mr Burstyner said the legal team was honoured and proud to have been able to achieve the outcome, and grateful for the exceptional support from the financier LLS, who provided a war chest of millions of dollars.
“We congratulate the plaintiffs from Strathmerton who put in a superhuman effort, as well as the other farmers who joined in the class action and assisted us in preparing a strong case,” he said.
The settlement is subject to court approval.