Dairy

Class action filed against Fonterra for 2016 price clawback

By Rodney Woods

Fonterra Australia will be heading to the courts as soon as next month, with dairy farmers wanting compensation for the money they lost due to the 2016 price claw-back.

The class action case will be run by law firms Adley Burstyner and Harwood Andrews, which are part of Lantern Legal Group and will utilise information generated by the ACCC investigations.

“I've looked at the contracts and I've listened to farmers and seen 10 months of Fonterra statements saying, with very limited exception, that the $5.60 price will be paid,” David Burstyner, the lawyer running the case, said.

“The only answer I can come up with as to why the company clawed back is that they didn't ask themselves, ‘is it legal?’, they asked themselves ‘can I get away with it?'.

“And it wasn't even as if it was a question of survival, with the Fonterra Group posting an $834 million net profit after tax for the year ending July 31, 2016, up 65 per cent (on the previous year).”

The Supreme Court Statement of Claim asks the court to declare that Fonterra engaged in misleading and deceptive conduct and unconscionable conduct, as defined in Australian Consumer Law, and that Fonterra breached its supply contract, and its obligation to match the farm gate milk price of Murray Goulburn.

“I have seen first-hand a great number of farmers distressed, wanting redress from Fonterra,” Mr Burstyner said.

Former Fonterra/Bonlac supplier of 22 years Bridget Goulding said the class action was a pleasant surprise but one that was well overdue.

“Initially, it literally came out of the blue,” she said.

“We wasn’t expecting it and we are ecstatic.

“(We'd like an outcome) probably sooner rather than later.

“It's good to see the papers being served on them as it happened four years ago.”

While the Gouldings have paid off there Fonterra Australia Support Loan and have been supplying ACM's Girgarre factory for the past 12 months, other farmers are not so lucky and have had to remain with the company until the loans are repaid.

Mrs Goulding said it was time that Fonterra owned up for what it did.

“Fonterra needs to face up to the fact that what they did was opportunistic,” she said.

“Suppliers of both Fonterra and Murray Goulburn not only suffered losses at the time but are still facing ongoing implications.

“The respect I have for the lead plaintiffs, for them to lead the class action on behalf of all Fonterra suppliers, is immense.”

Katunga's Paulette and Peter McIntosh, who retired from dairying two weeks ago, said they fully supported the class action and the comments by Mr Burstyner.

“We always felt that Fonterra's action in 2016 was nothing more than bloody-minded profiteering on the back of the collapse of MG,” they said.

In response, Fonterra Australia said it had spent a lot of time rebuilding the trust of suppliers.

“The ACCC investigated the 2016 milk price reduction thoroughly and in 2017 it decided not to take action against Fonterra,” a company spokesperson said.

“We’ve done a lot of work with our farmers since 2016 to rebuild trust and transparency.

“Fonterra takes its legal and regulatory obligations seriously and is committed to fully complying with them.

“We will address these claims comprehensively at the appropriate time.”

Mrs Goulding said it was too late for building up trust in the company.

“I think the trust and transparency is too late,” she said.

“The ACCC could have gone harder at them.

“I really hope this will be the catalyst for getting this sorted.”