Australian regulators announced Friday that they have imposed financial penalties on supermarket giant Coles and dairy company Brownes Foods Operations, with each company paying A$39,600 (approximately $28,270) following violations related to milk supply contracts.
The Australian Competition & Consumer Commission issued infringement notices targeting different practices by each company. Officials allege that Coles created two milk supply contracts that demanded exclusive supply arrangements to the country’s second-largest grocery chain while simultaneously placing limits on how much dairy farmers could produce.
The regulatory agency did not reveal which specific suppliers were subject to these restrictive agreements.
Meanwhile, Brownes Foods Operations faced penalties for failing to provide transparent pricing information in two separate contracts. Regulators claim the dairy firm did not adequately explain minimum pricing structures during the supply period or provide proper justification for those price floors.
Competition officials expressed particular concern about production volume restrictions in exclusive dairy contracts, stating these limitations harm farmers by reducing their output capacity while preventing them from working with other processing companies.
This enforcement action follows a recent court ruling that found Coles had deceived customers through a pricing scheme where the retailer increased costs on hundreds of products before advertising discounts that were still higher than previous sale prices.
