Murray Goulburn: Gary Helou likely to face fines following ACCC settlement – ABC Rural
Failed dairy processor Murray Goulburn has reached a settlement with the Australian Competition and Consumer Commission (ACCC) which will likely see former managing director Gary Helou fined.
The ACCC will apply to the Federal Court seeking declarations the Murray Goulburn and Mr Helou breached Australian Consumer Law in 2016.
MG and Mr Helou have both agreed that they broke the law, although MG will not face a financial penalty.
There is no indication at this stage about when the Federal Court will make a decision on the settlement.
In April last year, the ACCC alleged information Murray Goulburn provided to farmers in the months before dropping the milk price was “false and misleading”.
Farmers who were not expecting the price cut were adversely affected and not able to readjust their budgets.
The competition watchdog also alleged Mr Helou and former chief financial officer Bradley Hingle “were knowingly concerned in Murray Goulburn’s conduct”.
The ACCC has already reached an agreement with Mr Hingle.
When the ACCC announced the legal proceedings, chairman Rod Sims said the penalty for Mr Helou could be up to $220,000 per contravention.
“I don’t want to pre-empt the court proceedings,” he told the ABC in April last year.
Late last year, Murray Goulburn announced it had reached a settlement with corporate regulator, ASIC, for failure to meet its disclosure requirements in the lead up to a dramatic price cut in 2016.
In April 2016, MG slashed farmgate milk prices and demanded farmers pay back the difference, triggering a crisis in the dairy industry.
The decision left many farmers individually owing Murray Goulburn (MG) in excess of $100,000 and sparked panic in the sector.
In May this year, it sacked 360 staff and sold three processing facilities, and in early October it sacked a further 60 milk truck drivers.
It debuted on the ASX worth $500 million, but its financial performance waned over the next few years before being bought out by Canadian giant Saputo, for $1.3 billion, earlier this year.
Part of the deal left $195 million for MG to fight its various legal battles.
The company is currently the subject of two class actions organised by law firm Slater and Gordon and John Webster, a trustee for the Elcar Pty Ltd Super Trust Fund.
MG’s price cuts were swiftly followed by other processors, including Fonterra, which drove many farmers out of the sector, and saw Australia’s milk supply plummet.