| SYDNEY, April 28
SYDNEY, April 28 Australia's competition
regulator said on Friday it is taking legal action against
Murray Goulburn Co-operative Ltd, alleging the
country's largest dairy producer misled farmers over the price
they would be paid for their milk.
In April 2016, Murray Goulburn cut the price they paid
suppliers by 20 percent in a move that angered farmers, who said
the cut came so late in the season that they had little chance
but to continue producing at a loss.
After a year-long investigation, the Australian Competition
and Consumer Commission (ACCC) said that Murray Goulburn never
indicated to its farmer shareholders of a potential risk to
"Farmers relied on Murray Goulburn's representations and
were not expecting a substantial reduction in the farmgate milk
price, particularly so close to the end of the season when it
was not possible for them to practically readjust their
expenditure," said Rod Sims, chairman of the ACCC in a
The ACCC said it would not seek a financial penalty against
the dairy processor because it would unduly harm its farmer
shareholders. The regulator is, however, seeking the
disqualification of former CEO Gary Helou from future
directorships through court action.
Murray Goulburn said in a statement to the Australian
Securities Exchange that it was considering its response to the
Helou told an Australian parliamentary inquiry in February
he did not mislead shareholders. Requests for comment from Helou
on Friday, via Murray Goulburn, were not responded to.
Shares in Murray Goulburn fell nearly 2 percent immediately
following the ACCC announcement, eroding all daily gains enjoyed
by the cooperative.
While launching action against Murray Goulburn, the ACCC
cleared the world's largest dairy exporter, Fonterra
Co-operative Group, following a similar complaint over
the timing of cuts in milk prices in April 2016. The Australia
anti-trust regulator said Fonterra was more transparent with its
suppliers about potential price risks.
(Reporting by Colin Packham; Editing by Stephen Coates)