All three companies agreed to change clauses that had allowed them to unilaterally increase their prices in specified circumstances and impose penalties on customers who wanted to exit their contracts early. The watchdog also targetted dairy processors with Brownes Food Operations, Lion Dairy & Drinks, Norco Co-operative, Parmalat Australia and Fonterra Australia agreeing to amend specific terms in their milk supply agreements to remove parts that were unfair to dairy farmers. ACCC deputy chair Mick Keogh said the commission’s view was that the contract terms were likely to be unfair within the meaning of the Australian Consumer Law. "In the waste industry there is often very extended notice periods of six months so it is almost impossible for individual users of the services to move to another contract," he said.

"In the dairy industry it is slightly different ... it is relatively easy for the processor to modify the terms and the farmer had no choice but to agree to those conditions." Visy executive chairman Anthony Pratt. Credit:Jesse Marlow Call for penalties The ACCC wants penalties to be imposed on businesses with unfair contracts as when a court determines a contract term to be unfair it can only declare the terms to be void and unenforceable but cannot impose penalties or make compensation orders. “Because there are no penalties there is no discouragement of these clauses ,there is no incentive for businesses to clean them up they can just sit and wait for the ACCC to come along," Mr Keogh said. "The worst that can happen is a court might declare the clause in that contract void and that is all. There is nothing to stop those organisations reinserting that clause into their contracts in two years."

The ACCC is calling for unfair contract terms with small businesses to be made illegal and a penalty attached. Loading Mr Keogh said it is "certainly frustrating" for the ACCC which wants to send a stronger messages to businesses. "We would encourage big businesses to look at their contracts, sure there are no penalties involved but companies say they are embarrassed to be identified," he said. "There is a bit of a name and shame issue." A spokesperson for Lion said the business had "engaged proactively and constructively" with the ACCC and offered to make "minor improvements" to its contracts.