Murray Goulburn Co-operative has given the green light to an in-principle agreement with the Australian Competition and Consumer Commission in relation to allegations the company contravened consumer law in its handling of the 2016 milk price crisis.
A statement released to the Australian Securities Exchange (ASX) on Friday morning stated the ACCC was seeking declarations from the Federal Court that former managing director Gary Helou contravened Australian Consumer Law between February 29, 2016 and April 27, 2016 in relation to ‘‘representations made regarding the FY16 farm gate milk price’’.
The ACCC will seek a monetary penalty against Mr Helou, and costs against MG and Mr Helou.
Under the settlement, MG and Mr Helou will agree to the breaches and the costs ordered against each of them.
The ACCC will not seek any additional penalty against the co-operative.
‘‘Murray Goulburn is pleased to have reached an agreement with the ACCC on this matter,’’ MG chairman John Spark said.
The matter is due to come before the Federal Court for court approval of the settlement on December 6.
In April last year the ACCC alleged that from June 2015 until February 2016, Murray Goulburn misled farmers by representing that it had a reasonable basis for setting and maintaining an opening farm gate milk price of $5.60/kg MS and a forecast final milk price of $6.05/kg MS.
‘‘It considered the forecast final farm gate milk price of $6.05/kg MS was the most likely outcome for FY16, when that was not in fact the case,’’ an ACCC statement said at the time.
An agreement was previously reached with MG’s former chief financial officer Bradley Hingle to dismiss the ACCC’s proceedings against him.
MG shareholders overwhelmingly voted in favour of selling the co-op to Canadian dairy giant Saputo for $1.31billion in April.