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Australian Milk Supply Agreements Must Contain Mediation Clause

Tuesday, May, 5, 2020

Updates to the Australian Dairy Code of Conduct must include a mediation clause, as well as several other requirements including a statement that justifies minimum prices. The changes are a major shakeup for the industry and require processors to only buy milk from farmers with whom they have agreed. The updated code began on January 1, 2020, but did not apply to existing contracts created before that date.


All new contracts must be published on processor websites by June 1st.


The requirements of the new code apply to all processors that are not defined as small businesses. They must publish agreements and prices, and post disputes with suppliers and the agreements must remain on the websites until July 1, 2021.


Additionally, processors must post a statement of circumstances regarding when processors enter into the agreements. Processors may not have exclusive supply agreements with tiered pricing, nor can they set a maximum amount of milk supplied by a farmer.


A few things included in the Milk Supply agreements include:


  • A minimum 14-day cooling-off period
  • Information about when a transfer of ownership of milk occurs
  • Details about a dispute resolution process for handling internal complaints via mediation


In addition to posting the details of the contracts, processors are also required to post how many disputes went to mediation or arbitration and what those disputes involved. They also need to note how much time was required to resolve the dispute and what the outcome of the dispute was. This is different than many mediation protocols that guarantee confidentiality to participants.