FORMER Murray Goulburn managing director Gary Helou has been fined $200,000 after admitting the then dairy processor lied about a likely payment to farmers.
The Federal Court has ordered Mr Helou to pay the 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.
Australian Competition and Consumer Commission deputy chairman Mick Keogh said the penalty imposed against Mr Helou reflected his seniority at MG and involvement in misleading representations about the farmgate milk price.
MG 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 February 29, 2016, and subsequently until April 27, 2016, that it could maintain its opening milk price of $5.60 per kilograms of milk solids.
Mr Helou admitted he was involved in the misleading representations made by MG, which included not informing farmers of risks known to the company and making unfounded assumptions it could achieve its milk powder sachet sales targets.
“Murray Goulburn’s misrepresentations meant farmers were not informed of the likelihood the final milk price would fall below the opening price,” Mr Keogh said.
“This was important information for farmers as it would have influenced the business decisions each farmer made.
“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 MG because as it was a co-operative, any penalty imposed against it could end up being paid by the farmers who were misled.
As part of the resolution of the proceedings, Mr Helou will not be involved in the dairy industry for three years.
In August, the ACCC resolved its proceedings against MG’s former chief financial officer Bradley Hingle, after he agreed to pay a contribution to the ACCC’s costs and to not be involved in the dairy industry for three years.
The court also ordered by consent that MG and Mr Helou pay a portion of the ACCC’s legal costs.
In May this year, the operating assets and liabilities of MG were acquired by Canadian company Saputo.
Murray Goulburn continues to exist as a legal entity but only to deal with the ACCC and ASIC proceedings and current and future class actions, for which it retained about $200 million.