Regulation 12 Fixed volume contracts
This regulation applies to a milk purchase contract that specifies a fixed volume of milk.
A milk purchase contract specifies a fixed volume of milk if it provides that the producer is to supply a fixed, pre-determined volume of milk over a given period.
The milk purchase contract must—
set out the period, of no longer than 12 months, over which the volume of milk is to be supplied; and
set out upper and lower acceptable supply volumes applicable to that period.
“Acceptable supply volumes” are volumes of milk which fall above and below the fixed volume of milk specified in the contract but which nevertheless are subject to the same pricing terms as the fixed volume.
The milk purchase contract must also include provision setting out the remedies available to the business purchaser where the producer provides a volume of milk that is below the lower acceptable supply volume for the applicable period.
An exclusive milk purchase contract may not specify a fixed volume of milk.
“Exclusive milk purchase contract” has the meaning given in regulation 9(2).