Promoting and Protecting the Value of Dairy

The ADPF is leading greater understanding of the value of milk across multiple fronts: through instilling the credentials of dairy in Australian diets,    through enhanced stakeholder understanding of the value of milk through the Milk Value Portal, and by striving to promote a greater understanding of the significant contribution dairy processing makes to Australia’s economy.

The Australian dairy industry works best when all players are working harmoniously together.

ADPF will call out counter-productive policies that don’t benefit the entire Australian dairy supply chain. This means taking on big arguments and taking a stance on regulation that matters to members.

The Dairy Code of Conduct (Dairy Code) came into effect on 1 January 2020 and aims to improve the transparency of trading arrangements between dairy farmers and those buying milk.

The Dairy Code sets out mandatory elements in supply contracts. It requires processors that intend to purchase milk during the next financial year to publicly publish standard forms of milk supply agreements (MSAs) on their website before 2pm on 1 June each year, including minimum milk pricing.

The Government conducted its first scheduled review of the code in 2021, with the review’s report publicly released in February 2022. The Government response to the review report was then released in March 2022.

The Review Report found that the Dairy Code of Conduct provides a valuable framework for the dairy industry but there are still areas for improvement. To better the function of the Dairy Code, three recommendations have been put forward:

Recommendation 1

The Code should be amended to:

  1. clarify the definition of ‘minimum price’ under the Code, to explain that deductions related to milk quality will not contravene the ‘minimum price’ requirements
  2. allow, where agreed by both parties to a Milk Supply Agreement (MSA), an exemption from the minimum price requirements for a specified quantity of milk to enable participation in alternative milk pricing markets
  3. confer the roles of mediation and arbitration adviser under the Code to the Australian Small Business and Family Enterprise Ombudsman.

To note: due to the election and the Government in caretaker mode, timings for changes to the Code were delayed.

Recommendation 2

To support the operation of the Code, the Australian Government should:

  1. develop additional guidance material to assist compliance with the Code
  2. work with industry stakeholders to continue to make improvements to price transparency.

The development of additional ACCC guidance materials is now complete – refer to the supporting notes below.

Recommendation 3

The Australian Government and industry stakeholders should investigate and gather further evidence to determine suitable solutions to address the following areas for potential improvements to the Code:

  1. extensions of 3-year contracts
  2. small business definition and exemptions
  3. MSA variation requirements
  4. non-exclusive contract arrangements
  5. minimum price in multi-year contracts
  6. multi-party dispute resolution and arbitration.

Work in this area is expected to commence in the second half of 2022, ahead of the the Australian Government’s second review of the Code which can be announced on or after 1 January 2023.

Click here for the Australian Government’s response to the first review of the Dairy Industry Code.

Dairy Code of Conduct – updated Guidance notes and a new processor checklist now available

The ACCC updated its guidance materials on the Dairy Code of Conduct in May 2022.

The updated guidance provides greater detail on the interpretation of the Code’s ‘single document’ requirement, arrangements for cooperatives and collective bargaining groups, what constitutes a ‘material breach’, loyalty payments and other bonuses, and the requirements to publish dispute reports.

Key updates and changes enclosed in the checklist include:

  • Transitional periods: references have been removed to the Code’s transitional period.
  • Single document requirement: additional detail has been provided around non-written Milk Supply Agreements (MSAs), and how milk supply handbooks should be incorporated into MSAs as well as guidance around the use of pricing letters and directed processors to consider any implications arising out of the minimum price, step-down, and good faith requirements under the Code.
  • Collective bargaining groups: collective bargaining groups do not receive any special concessions under the Code. General guidance has been provided on factors collective bargaining groups should consider under broader competition laws, and a link to the ACCC’s small business collective bargaining class exemption.
  • Cooperatives: cooperatives receive a limited exemption from the supply period requirements and are permitted to enter into open-ended agreements with their members. The ACCC’s interpretation of what constitutes a cooperative has been further signposts.
  • Material breach: additional guidance sets out further detail around ‘material breach’, including the view that a ‘material breach’ refers to an important or significant breach. However, only courts can determine whether a particular breach of an agreement is in fact a material breach. General examples of conduct that may constitute a material breach, such as regular or habitual breaches or many unremedied breaches by the farmer, have been outlined.
  • Loyalty payments: guidance provides some additional detail on loyalty payments, including that they can only be subject to certain conditions, that farmers are entitled to pro rata payments if an agreement is terminated early, and reminds processors to be mindful of their other Code and Australian Consumer Law obligations in relation to other supplementary payments to farmers.
  • Publication of dispute reports: guidance clarifies that all processors must publish a report on disputes, even if nil disputes have been reported in the relevant period.

To summarise the core obligations under the Code, the ACCC has also released a new processor checklist to support the development of a MSA. It covers dealing in good faith, publication requirements, key requirements for executed MSA, variations, terminations, as well as complaints, disputes, and record-keeping.

It is important to note that this checklist is not a complete summary of obligations, and processors should seek specialist advice on how the Code applies to their circumstances.

Access the ACCC’s ‘Processor checklist for the Dairy Code’ here.

Our focus:

ADPF hopes that the Dairy Code will see greater cooperation between farmers and processors – key to the long-term success of our industry.

We have supported the introduction of the Dairy Code through member education and resources, such as the development of the ADPF Sample Template of Dairy Code Compliant Milk Supply Agreement Terms that can assist dairy processors and farmers with the negotiation of a Milk Supply Agreement.

ADPF has now taken this a step further by creating the Milk Value Portal, which provides publicly available milk pricing data and puts it into an easy-to-interpret format for farmers and analysts. This enables a better understanding of how farmgate milk pricing works and the factors affecting milk prices offered to farmers across Australia.

For more information on the Dairy Code, visit the ACCC’s website.

Since deregulation, there has never been a comprehensive, central point of information for farmers to get an understanding of how farmgate milk pricing (FMP) works.

FMP is seen by many as complex, risking making on farm revenue business decisions more difficult than many would like.

While the ADPF it is not in a position to simplify it, it is able to use primary data exclusively from dairy processors, to better help explain the complex question ‘what is the FMP?’ and ‘what drives the FMP?’

In an industry-first, the ADPF with the support of dairy processors – both ADPF members and non-members – have created the Milk Value Portal, designed to provide farmers and analysts data and insights to better understand the milk market and make more-informed business decisions to get the most value out of their raw milk.

At the core of the Milk Value Portal is the Farmgate Milk Value Tool, which takes aggregated FMP data and puts it into an easy-to-use format that farmers can easily interpret.

The tool allows a farmers to enter their farm parameters such as geography, farm size, and milk fat and protein content to see what is the average value of their milk, at a particular time of year – in cents/ litre and $/ Kg of milk solids.

The data is regularly updated to ensure the Portal remains relevant.

The Portal will also feature relevant intelligence and insights of the dairy products market (local and global) and supply chain influences on FMP.

Milk Value Portal is ADPF’s commitment – as the peak body for dairy processors – to industry trust and transparency and rebuilding trusted partnerships between farmers and processors, as well as Commitment 5 of the Australian Dairy Plan.

The Milk Value Portal is available through a simple, mobile-friendly website. For more information, visit

The Health Star Rating system is a front of pack labelling system that uses a star-rating to highlight the nutritional profile of packaged foods in Australia – with a rating of 0.5 to 5 stars, with 5 stars being the best.

Since its implementation in June 2014, the dairy industry has advocated for a fair labelling system that appropriately represents the nutritional credentials of dairy foods – milk, yoghurt and cheese. Unfortunately, many yoghurt and cheeses scored less than 3 stars – despite a founding principle that all Five Food Group (or ‘core’ foods – which includes dairy) score a minimum of 3 stars.

In November 2020, the Health Star Rating calculation system was revised, and while improvements were achieved for yoghurts, more than half of all Five Food Group (or ‘core’) cheeses continue to score less than three out of five stars.

In February 2021, further updates were announced. Calculator 1 (recommended for implementation by the Review) will be adopted over the next two years. In addition, while the system remains voluntary, uptake targets have been set at 50% at 3 years (2023), 60% at 4 years (2024) and 70% at 5 years (2025), for all products to apply the HSR system [Note: at the end of Year 6, 41.2% of eligible products displayed the HSR system, up from 38.6% in Year 5. Compliance with the HSR Calculator and Style Guide continues to be significant (>90%)].

Our focus:

Cheese is an integral part of the dairy food group, which alongside grains, vegetables and legumes, lean meats and fruits, is considered a Five Food Group, as per the Australian Dietary Guidelines (ADG). The ADG state that Five Food Groups are those that should be consumed regularly as part of a balanced diet.

Despite this, in July the Australian and New Zealand Ministerial Forum on Food Regulation endorsed a revised Health Star Rating system that fails to take into the account the nutritional benefits of cheese, and unfairly puts it in on par with certain junk food purely due to its inherent sodium and fat content.

ADPF supports the principles of the Health Star Ratings as an important tool to help Australians make informed, healthy food decisions. However, we continue to advocate for the nutritional benefits of Five Food Group cheeses to be better acknowledged, as dairy plays an important role in a balanced diet.

Ninety per cent of Australians do not consume the recommended daily intake of dairy, and the current Health Star Rating system threatens to increase that number. That is why ADPF is working alongside Dairy Australia in seeking to continue to engage government to achieve an improved outcome for cheeses under the Health Star Rating system.

The Australian Dietary Guidelines (ADG) is an important public health document, providing current and scientific advice on how to enhance health and wellbeing through dietary patterns.

Dairy foods are recognised in the ADG as an integral part of a healthy and sustainable eating pattern, covering milk, cheese, yoghurt, and custard. First published in 2013, the ADG helps to guide policy, regulation, and education and is currently under review to ensure that it reflects the latest scientific evidence and consumer insights.

The review of ADG is expected to now pick up the pace with the scope and review topics to underpin the Guidelines to be finalised any day – noting the National Health and Medical Research Council (NHMRC) timeline of Q1 2022.

NHMRC has been awarded $2.5 million in funding to undertake this review under the leadership of an Expert Committee to be chaired by Professor Sarah McNaughton, a nutritional epidemiologist in the School of Exercise and Nutrition Sciences, Deakin University.

Following the review scope being finalised, the Expert Committee is then expected to call for supporting evidence by Q2 2022, with the first draft of the Guidelines due Q1 2023 and finalised Q2 2024.

ADPF, in partnership with DA is continuing to monitor the situation and reinforce the importance of dairy as part of a sustainable diet and lifestyle, along with preparing the necessary evidence to support an industry submission.

Click here for further information on the Australian Dietary Guidelines timeline.

Our focus:

The dairy industry’s position is that we support the review of the Australian Dietary Guidelines (ADG) as we seek to maintain our position as a meaningful part of the critical conversations throughout the review process. 

Under the review, dairy is defined as milk, cheese, yoghurt and custard – plain and flavoured, regular and reduced fat. Our aim is that dairy foods are recognised as an integral part of healthy, sustainable eating patterns, due to dairy’s contribution to the health and wellbeing of Australians.

The Dietary Guideline review must reflect the latest scientific evidence and consumer insights, be underpinned by positive language and practical messaging, and adopt a regular review period (suggesting every 5 years).

As part of the wider review, we are proposing a review of four existing elements of the current guidelines, as well as the introduction of three new elements to the guidelines.

We propose the following existing elements are reviewed:

  • Whole foods, holistic nutrition and food matrix
  • ‘Mostly reduced fat’ dairy recommendations
  • Plant-based products that qualify as ‘dairy alternatives’
  • Cheese consumption limitations of 2-3 times per week

We propose the introduction of the following new elements:

  • Sustainable eating patterns
  • Processing and the role of safe food production
  • Life-stage nutrition, including the cultural and social elements of food.

In October 2019, the following matter was referred to the Rural and Regional Affairs and Transport References Committee for inquiry, with a report due by 25 March 2020, referencing:

  • the ability of Dairy Australia to act independently and support the best interests of both farmers and processors;
  • the accuracy of statistical data collected by Dairy Australia and the Australian Bureau of Statistics;
  • the funding of Dairy Australia and the extent of its consultation and engagement on the expenditure of levies revenue;
  • the merits of tasking the ACCC to investigate how it can regulate the price of milk per litre paid by processors to dairy farmers to ensure a viable dairy industry;
  • alternative approaches to supporting a viable dairy sector;
  • the introduction of a mandatory industry code of practice; and
  • any related matters.

The Report was released on Thursday 18 March 2021 and outlines 14 recommendations – with several related to dairy processors.

Processor initiatives in progress

The Australian Dairy Products Federation (ADPF) and its members are committed to a thriving, profitable and sustainable dairy industry that meets the demands of the vibrant domestic market and remains export competitive.

We are pleased to say that the processing sector has a number of initiatives in progress that address the recommendations outlined in the Senate Inquiry Report – in addition to related work underway on the Australian Dairy Plan and the Milk Value Portal.

To note:

  • ADPF is one of four industry Partners involved in the development and implementation of the Australian Dairy Plan – an industry five-year strategy that aims to drive profitability, confidence and unity in the dairy industry, underpinned by five key commitments and key ongoing programs.
  • In November 2020, the ADPF launched the Milk Value Portal (, which is a processor-led, first-of-its kind tool for the Australian dairy industry to improve understanding and transparency around farmgate milk price and the value of raw milk, as well as enable more informed business decisions. It is supported by ongoing education and resources, including a quarterly market insights reports.

Examples of specific activities related to the Report recommendations:

ADPF in collaboration with Dairy Australia, is undertaking a Due Diligence project to understand the value of their ‘whole of supply chain’ program to dairy processors. The outputs aim to guide this scope of work and the potential financial contribution from processors (as well as lending to a broader piece of work on industry organisational reform) [Report recommendation 2].

ADPF and its members have worked diligently to implement the Dairy Code of Conduct that came into effect on 1 January 2020 (supported by stakeholder education and industry resources) and are also preparing for the 12-month review expected to commence in July.

Examples include:

  • ADPF was an active participant in the ACCC Dairy Consultative Committee providing processors insights on the implementation of the Dairy Code, guiding development of education materials, and using processors networks to distribute communication and resources.
  • ADPF member forums on the Dairy Code.
  • Development of an ADPF industry template to support dairy processors and farmers complete the standard (non-negotiable) items in a Milk Supply Agreement.
  • Numerous farmer education sessions convened by dairy processors.
  • Submitting detailed processor feedback on the implementation of the Dairy Code, to the ACCC’s Inquiry into Perishable Agriculture Goods [recommendations 4/5].

ADPF will continue to monitor the landscape and proactively engage with stakeholders to support and drive the viability of the dairy industry.

Agreement reached on proposed Fair Go Dairy Scheme

The Australian Dairy Products Federation (ADPF), Queensland Dairyfarmers’ Organisation (QDO) and the Australian Competition and Consumer Commission (ACCC) have reached an agreement to resolve ADPF’s application to the Australian Competition Tribunal on the basis that the ACCC’s authorisation of the QDO ‘Fair Go Dairy’ trademark licensing scheme is set aside.

The Tribunal has confirmed that it has made that determination by consent, setting aside ACCC authorisation AA1000530.

The effect of that consent determination is that, consistently with the relief sought by ADPF in its application, the QDO ‘Fair Go Dairy’ scheme is no longer authorised.

ADPF is pleased QDO has consented to the authorisation being set aside, bringing the right outcome for the dairy industry and consumers.

ADPF’s application to the Competition Tribunal and Statement of Facts Issues and Contentions is publicly available on the Tribunal’s website



On 12 March 2021, the Australian Competition and Consumer Commission (ACCC) issued a determination granting an application by Queensland Dairyfarmers’ Organisation Ltd (QDO) for authorisation in respect of the ‘Fair Go Dairy’ product licensing scheme.

The Australian Dairy Products Federation (ADPF) lodged an application to the Australian Competition Tribunal (Tribunal) in April, for review of the ACCC’s determination. The application sought a determination from the Tribunal that the ACCC’s determination be set aside. ADPF brought this application for review after careful consideration for the wellbeing of the dairy industry.

ADPF was proceeding with its application before the Tribunal and had recently filed a detailed Statement of Facts Issues and Contentions setting out the basis upon which the ‘Fair Go Dairy’ licensing scheme authorisation should be overturned.

In September 2020, Minister Littleproud convened a round table to understand industry’s views on the labelling and marketing of plant-based alternatives (PBA) and whether consumers may be being misled by current communication.

It was agreed that a PBA working group be established to conduct an evidence-based investigation on labelling and marketing of plant-based alternatives versus meat and dairy, and to consider whether existing arrangements can be improved – taking lessons from the Food Forum Ministerial review that concluded in July 2020.

The findings of the PBA working group will be used to develop an understanding of options to present to the Minister in March, along with recommendations for stakeholder engagement.

Our focus:

Both ADF and ADPF are part of the working group, supported by the technical expertise of Dairy Australia and a dairy processors sub-committee. We are working to provide a sound evidence base on which to base the recommendations on.

Milk Value Portal

A one-stop shop designed to provide farmers and analysts data and insights to better understand the milk market and get the most value out of their raw milk

Visit the Portal