EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations make provision in respect of commercial contracts for the purchase of pigs between persons purchasing pigs in the course of carrying on their business (business purchasers) and qualifying sellers.
Regulation 3 requires a business purchaser to use a “pig purchase contract” that complies with these Regulations when purchasing pigs from a qualifying seller, and makes general provision about the use of pig purchase contracts.
Regulation 4 provides that these Regulations do not apply to purchases of pigs where the qualifying seller gives notice to that effect to the business purchaser.
Regulation 5 makes provision about the format of the pig purchase contract. Regulation 6 provides that the duration of the pig purchase contract must either be fixed or evergreen (as defined). Regulation 7 sets out the permitted pricing models.
Regulation 8 makes provision in relation to fixed price pig purchase contracts, including provision about the review of the fixed price in exceptional market conditions. Regulation 9 makes provision in relation to variable price pig purchase contracts. Regulation 10 makes provision about the method and frequency of payment.
Regulation 11 provides that where business-sensitive data (as defined) is used in relation to a variable price, the pig purchase contract must provide that the qualifying seller may refer the explanation given under regulation 9 to an independent person for verification.
Regulation 12 makes provision as to the quantity of pigs to be supplied under a pig purchase contract, including provision as to remedies that are available to the business purchaser when the amount of pig is below the minimum quantity specified in the contract.
Regulation 13 makes provision for the terms relating to the collection or delivery of pigs by the business purchaser or the qualifying seller respectively. Regulation 14 requires pig purchase contracts to contain force majeure clauses.
Regulation 15 makes provision for the requirements in pig purchase contracts relating to the giving of notices under them. Regulation 16 makes provision for the variation of terms of a pig purchase contract. Regulation 17 requires pig purchase contracts to contain a dispute resolution procedure. Regulation 18 makes provision concerning termination of pig purchase contracts.
Regulation 19 provides that a qualifying seller may refer a complaint relating to the compliance of the pig purchase contract with the requirements of these Regulations to the Secretary of State. Regulation 20 gives the Secretary of State powers to impose a civil penalty on a business purchaser found to have failed to comply with their obligations, and to require the payment of compensation. Regulation 21 requires the Secretary of State to publish guidance on those powers, and regulations 22 to 24 set out the applicable procedure where they are exercised. Regulation 25 makes provision in relation to appeals.
Regulation 26 makes provision for the Secretary of State to review these Regulations.
Regulation 27 makes amendments to regulation 9 (tiered pricing) of the Fair Dealing Obligations (Milk) Regulations 2024 (S.I. 2024/537). The amendment allows exclusive milk purchase contracts made by a business purchaser which has an internal democratic structure to include provisions that provide for the price to be paid for milk under the contract to change if the amount of milk produced exceeds a certain volume, provided the contract sets out the amount by which the price is to change as a numerical value per unit of milk and specifies the volume of milk above which the change in price is to apply.
A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sectors is foreseen. A de minimis assessment has been prepared as this instrument is likely to entail some costs for businesses but the net impact is estimated to be below £5 million per year. It is available from the Department for Environment, Food and Rural Affairs, 2 Marsham Street, London, SW1P 4DF.