$200,000 penalty for milking it

Former Murray Goulburn Co-operative Managing Director Gary Helou has been ordered to pay $200,000 in penalties for being knowingly concerned in Murray Goulburn’s false or misleading claims about the farmgate milk price it expected to pay dairy farmers during the 2015–16 milk season.

Murray Goulburn admitted to making false or misleading representations in breach of the Australian Consumer Law when it represented to farmers in Victoria, South Australia and southern New South Wales on 29 February 2016, and subsequently until 27 April 2016, that it could maintain its opening milk price of $5.60 per kilogram of milk solids.

Helou has admitted he was involved in the misleading representations made by Murray Goulburn. This included not informing farmers of risks known to Murray Goulburn and making unfounded assumptions that Murray Goulburn could achieve its milk powder sachet sales targets.

“The penalty imposed against Mr Helou reflects his seniority at Murray Goulburn and involvement in misleading representations about the farmgate milk price,” ACCC Deputy Chair Mick Keogh said.

“Murray Goulburn’s misrepresentations meant farmers were not informed of the likelihood the final milk price would fall below the opening price. This was important information for farmers as it would have influenced the business decisions each farmer made,” Keogh said.

“Farmers were denied the opportunity to plan for the impact of the reduced milk price on their businesses between February and April 2016, including implementing measures to reduce their exposure to a decrease in the milk price or shopping their milk around to other dairy processors.”

The ACCC did not seek a penalty against Murray Goulburn because as it was a co-operative, any penalty imposed against it could end up being paid by the very farmers that were misled.

“We were conscious not to seek penalty orders that would adversely affect farmers for the wrongs committed by Murray Goulburn, so we focused on obtaining appropriate orders against the individuals involved in the conduct,” Keogh added.

As part of the resolution of the proceedings, Helou has undertaken to the Court that he will not be involved in the dairy industry for three years.

In August 2018, the ACCC resolved its proceedings against Murray Goulburn’s former Chief Financial Officer, Bradley Hingle, after he consented to an order that he pay a contribution to the ACCC’s costs and gave an undertaking to the Court that he wouldn’t be involved in the dairy industry for three years.

The Federal Court also ordered by consent that Murray Goulburn and Helou pay a portion of the ACCC’s legal costs.

Originally published here.