Bega issued a trading update on July 13, which said the company was competing for milk supplies and increasing the milk price to a level that was about 30 per cent higher than 2022 financial year prices.

The company also announced a slight reduction in its projected earnings for this financial year.

The company suffered a major share sell-off on July 14 and the share price has declined in recent months.

ASX compliance officers have asked Bega to explain if the pricing was market sensitive and if the information was disclosed before July 13.

The ASX letter referenced an article published in the Australian Financial Review, which said a Victorian dairy farmer had Tweeted about a proposed price increase before it was announced publicly.

The letter also referred to an opinion column from the same newspaper drawing attention to a share sell-off by big market players without any apparent reason.

“Milk procurement has always been an aspect of BGA’s business and the prices paid for milk in any particular year vary depending on local and international returns for dairy products,” the reply from Bega Cheese to the ASX said.

“Providing a commentary on milk prices without a thorough assessment of the returns that can be achieved from milk acquired from farmers would only tell one part of BGA’s business.

“As such, an increase in farm gate milk prices for the financial year 2023 is not, in itself, information that a reasonable person would expect to have a material effect on the price or value of BGA securities,” Bega said in the statement.

Farm pricing was just one of the many costs in the business, Bega said.