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Coles Supermarkets Australia and Brownes Foods have each paid AUD 39,600 (approx. $28,300) in penalties after the Australian Competition and Consumer Commission (ACCC) issued infringement notices alleging separate breaches of Australia’s mandatory Dairy Code of Conduct.
The ACCC alleged that Coles published two milk supply agreements containing exclusive supply requirements while also imposing caps on the maximum milk volumes farmers could produce.
According to the regulator, such provisions may restrict producers’ ability to supply milk elsewhere while simultaneously limiting production growth.
Separately, Brownes Foods was accused of publishing two milk supply agreements that failed to clearly specify minimum prices applying across the entire supply period and did not adequately explain the basis for those prices.
In a statement, Mick Keogh, deputy chair of the ACCC, said: “Dairy farmers need clear, accurate information about supply terms and prices when deciding who they will supply. Terms that limit a farmer’s ability to supply, or documents that don’t properly set out minimum prices and the reasons for them, undermine the transparency the Dairy Code is designed to deliver."
The ACCC also raised concerns about the use of production caps in exclusive supply agreements, warning that such arrangements could significantly affect farm operations and commercial flexibility.
“Volume caps in exclusive milk supply agreements are particularly concerning. They can cause significant harm to farmers by limiting milk production while also restricting their ability to supply multiple processors,” Keogh added.
The regulator noted that payment of an infringement notice does not constitute an admission of liability or a breach of the Code.
The enforcement action forms part of the ACCC’s broader compliance program for the dairy sector. The regulator said it also engaged with three additional dairy processors over minor alleged breaches of the Code, with those businesses taking corrective action following formal warnings.
“Our Dairy Code enforcement approach is to be proportionate and fair, which means taking stronger enforcement action for more serious breaches or repeated non-compliance,” Keogh said.
The ACCC is urging all dairy processors to review their compliance obligations ahead of the Dairy Code’s annual publication deadline of 1 June 2026. Under the mandatory code, processors purchasing milk directly from farmers and generating annual turnover above A$10 million must publish standard form milk supply agreements, pricing terms, and dispute resolution reporting documents each year.
Coles is one of Australia’s largest milk processors, purchasing approximately 490 million litres of fresh milk annually across southern dairy regions and Western Australia for retail distribution through its supermarket network.
Brownes Foods, based in Western Australia, purchases around 150 million litres of milk annually from approximately 50 dairy farmers.
Introduced to improve transparency and bargaining fairness within the dairy supply chain, the Dairy Code of Conduct remains a central regulatory mechanism governing processor-farmer relationships in Australia’s dairy industry. The latest ACCC action signals continued scrutiny of contract terms and pricing disclosures as regulators seek to strengthen protections for primary producers.