PART 4Pricing and payment
Permitted pricing
regulation 7 7. A pig purchase contract must use—
regulation 7 a (a)a fixed price;
regulation 7 b (b)a variable price; or
regulation 7 c (c)a combination of a fixed price and a variable price.
Use of a fixed price
regulation 8 8.—(1) Where a pig purchase contract uses a fixed price (whether or not in combination with a variable price), it must do so in accordance with this regulation.
(2) A “fixed price” is a price, set out in the pig purchase contract, that—
regulation 8 2 a (a)is expressed per quantity of pigs; and
regulation 8 2 b (b)will be paid by the business purchaser to the qualifying seller for pigs supplied under the contract.
(3) The pig purchase contract may set out more than one fixed price within the duration of the contract.
(4) The pig purchase contract must specify—
regulation 8 4 a (a)the period within the duration of the contract to which each price relates; and
regulation 8 4 b (b)the date on which each period begins and ends.
(5) The pig purchase contract must set out a procedure by which the price may be reviewed where exceptional market conditions occur.
(6) The pig purchase contract must set out what constitutes exceptional market conditions for the purpose of the procedure referred to in paragraph (5).
(7) The procedure referred to in paragraph (5) must provide that, where requested by the qualifying seller, the business purchaser must, within 30 days beginning with the date on which the request was made, invite the qualifying seller to enter into a discussion with the purpose of—
regulation 8 7 a (a)reviewing the price payable under the pig purchase contract at the time of the exceptional market condition occurring; and
regulation 8 7 b (b)where both of the parties agree, changing that price.
Use of a variable price
regulation 9 9.—(1) Where a pig purchase contract uses a variable price (whether or not in combination with a fixed price), it must do so in accordance with this regulation.
(2) A “variable price” is a price per quantity of pigs that is not fixed at the point that the pig purchase contract is made but is determined—
regulation 9 2 a (a)in accordance with; or
regulation 9 2 b (b)by the business purchaser with reference to,
factors set out in the pig purchase contract.
(3) Where the pig purchase contract makes provision in accordance with paragraph (2)(b), it must provide that the business purchaser must have due regard, as far as it is reasonably practicable to do so, to only the factors set out in the pig purchase contract when determining the price per quantity of pigs.
(4) The pig purchase contract may provide for the price per quantity of pigs to be determined by reference to more than one set of factors within the duration of the contract.
(5) Where the pig purchase contract accords with paragraph (4), it must specify—
regulation 9 5 a (a)the period within the duration of the contract to which each set of factors relates; and
regulation 9 5 b (b)the date on which each period begins and ends.
(6) The pig purchase contract must provide how often the price per quantity of pigs is to be determined.
(7) After the price per quantity of pigs is determined under the pig purchase contract, the qualifying seller may by written notice request that the business purchaser give them a written explanation as to—
regulation 9 7 a (a)how the price was determined; and
regulation 9 7 b (b)where the price per quantity of pigs is to be determined by the business purchaser, how the factors to which the business purchaser is to have due regard influenced the price.
(8) The notice described in paragraph (7) may be given once each time the price is determined.
(9) The business purchaser must give the explanation requested in the notice within 7 days beginning with the date on which the notice described in paragraph (7) was given.
(10) Paragraphs (7) to (9) do not apply if at least 97.5% of the price per quantity of pigs is determined in accordance with a formula set out in the contract using only objective factors that are—
regulation 9 10 a (a)able to be expressed as a numerical value; and
regulation 9 10 b (b)available to both of the parties.
Method and frequency of payment
regulation 10 10. A pig purchase contract must set out—
regulation 10 a (a)the first day on which;
regulation 10 b (b)the method by which; and
regulation 10 c (c)the frequency with which,
the business purchaser will pay the qualifying seller for pigs under the contract.
Referral of relevant variable price to independent third party
regulation 11 11.—(1) A pig purchase contract that uses a relevant variable price must include a third-party verification procedure.
(2) A “third-party verification procedure” is a procedure which enables a qualifying seller to refer an explanation given in accordance with regulation 9(9) to an independent person—
regulation 11 2 a (a)for the purpose of seeking their professional opinion as to the extent to which any references to business-sensitive data are accurate; and
regulation 11 2 b (b)to confirm that, in the reasonable, professional opinion of the independent person, the explanation is supported by the business-sensitive data.
(3) The business purchaser must—
regulation 11 3 a (a)cooperate with the independent person, to such extent as is reasonably requested by the person; and
regulation 11 3 b (b)provide such information or specified documents as are reasonably requested by the person.
(4) Paragraph (3) does not apply if the independent person does not confirm to the business purchaser that they will not share business-sensitive data without the business purchaser’s consent.
(5) The pig purchase contract must—
regulation 11 5 a (a)provide that the independent person engaged to verify business-sensitive data is to be agreed upon by the business purchaser and qualifying seller; and
regulation 11 5 b (b)provide for the costs of the independent person to be apportioned between the parties.
(6) But the pig purchase contract must provide that the qualifying seller may not be apportioned a greater share of the costs of engaging the independent person than is apportioned to the business purchaser.
(7) In this regulation,
“business-sensitive data” is data—
the source of which is the business purchaser; and
that is of a confidential nature;
term relevant variable price “relevant variable price” means a variable price which is determined with reference to business-sensitive data.
(8) Data is of a confidential nature if it is stated as being so in the pig purchase contract.