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Coles to Pay A$5m to Dairy Farmers

05 December 2019

AUSTRALIA - Coles will pay over $5 million to Norco dairy farmers after it was found it had not passed on the full amount of a milk price rise, despite claiming it did in a marketing campaign.

The payments follow an Australian Competition and Consumer Commission (ACCC) investigation into whether Coles had fully passed on to Norco a 10 cents per litre price increase it charged consumers for Coles branded milk, as it claimed it would do in marketing materials.

The ACCC's investigation focused on claims that when an unrelated 6.5 cents per litre increase commenced on April 1, 2019, Coles reduced its payments to Norco under the 10 cents per litre retail price increase from 10 cents per litre to 3.5 cents per litre.

Norco is a milk co-operative comprised of 194 member farms in northern New South Wales and Queensland.

Norco supplies milk to Coles for its Coles branded milk, and also produces milk bearing the Norco brand, which is supplied at several of Coles' stores.

"We were fully prepared to take Coles to court over what we believe was an egregious breach of Australian consumer law," ACCC Chair Rod Simms said.

The ACCC said apart from the lump sum payment to Norco, Coles would also pass on the additional 7 cents per litre for its Coles branded two and three litre bottles of milk up until June 2020 .

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Source: ABC Online

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