Dairy

Murray Goulburn’s former managing director fined over milk price crash

By Alana Christensen

The former manager director of Murray Goulburn Co-operative has been slugged with a $200000 penalty in relation to false and misleading claims made during the 2016 milk price crash, yet many former suppliers say the fine does not reflect the harm caused.

Gary Helou, who led the company for five years, admitted to being involved in the misleading representations made by Murray Goulburn in the Federal Court last Thursday by leading farmers to believe the co-op could maintain its opening milk price of $5.60/kg milk solids.

The Australian Competition and Consumer Commission said it did not seek a penalty against Murray Goulburn because it was a co-operative, and any penalty imposed against it could end up being paid by the very farmers that were misled.

Gunbower dairy farmer and former Murray Goulburn supplier Stephen Brown said he suspected it would be the ‘‘black mark on his resume’’ that hurt Mr Helou more than the fine.

‘‘He led everyone on a merry dance, didn’t he?’’ the now-Saputo supplier said.

‘‘Some people are too willing to exploit any weakness they can see.’’

Murray Goulburn also admitted to making false or misleading representations in breach of Australian Consumer Law.

UDV interim president Paul Mumford said the decision brought the industry one step closer to closure after the ‘‘tragic event’’.

As a former Murray Goulburn supplier himself, Mr Mumford said he was one of hundreds who believed in the co-operative principle.

‘‘It is good to see the judgment was handed down only in the hands of management but it’s a little disappointing the scale of the fine doesn’t reflect the scale of the event,’’ he said.

‘‘It’s very disappointing he got off scot-free with a minor fine.’’

The maximum penalty available per contravention under the law is $1.1million for corporations and $220000 for individuals.

As part of the resolution Mr Helou has agreed not to be involved in the dairy industry for three years.

In August the ACCC settled with Murray Goulburn’s former chief financial officer, Bradley Hingle, after he agreed to pay some of the ACCC’s costs and not to be involved in the dairy industry for three years.

The court also ordered Murray Goulburn and Mr Helou pay a portion of the ACCC’s legal costs.

The dairy processor was officially sold to Canadian dairy giant Saputo on May 1 for $1.31billion and currently exists only as a legal entity to deal with the ACCC and Australian Securities and Investments Commission proceedings and current and future class actions.

Murray Goulburn retained about $200million to deal with these liabilities, with any unspent money to be distributed to farmer shareholders and unit-holders.

■Changes to ‘unfair’ milk contracts, page 41.