THE Australian Competition and Consumer Commission has accused Coles of misleading conduct regarding the amount of a national milk levy actually paid to dairy farmers.
The ACCC said it had been looking into whether Coles fully passed on to Norco a 10 cents per litre price rise that it had charged consumers for Coles branded fresh milk, as it claimed it would do in marketing material.
The ACCC said the supermarket had now committed in writing to the payments which would add up to about $5.25 million for milk supplied between April 1 and June 30 2020.
Scenic Rim dairy farmer Gary Wenzel said the move came as a surprise.
"I don't think anyone knew this was coming bar the ACCC and Coles," he said.
Mr Wenzell said the decision was a win for the 10 remaining dairy farmers operating in the Scenic Rim.
The investigation focused on claims that when an unrelated 6.5c/L increase started on April 1, Coles reduced its payments to Norco under the 10c/L retail price increase from 10c/L to 3.5c/L. ACCC chair Rod Sims said Coles had allowed people to believe that its 10 cent price rise would go straight to dairy farmers.
"We were fully prepared to take Coles to court ... we believe we had a strong case to allege misleading conduct by Coles," he said.
"Accepting this commitment means that farmers will receive additional payments from Coles, with the majority of the money to be paid to Norco within seven days. The ACCC will be keeping a very close eye on Coles to ensure they follow through on this commitment, and we are not ruling out future litigation if necessary," Mr Sims said.
A statement from Coles said they would pay Norco a $2.8 million lump sum to be distributed to farmers and an additional 7c per litre for 2L and 3L Coles brand milk produced by Norco until at least the end of the financial year.
"Coles respects the regulatory process but disagreed with the ACCC's interpretation of these issues," it said.
