Guidance

Additional guidance for The Fair Dealing Obligations (Pigs) Regulations 2025

Updated 25 June 2025

Background information

1. The Agriculture Act 2020 introduced powers to allow the creation of regulations that protect UK producers from unfair treatment within the supply chain.  Following this, we have engaged with several sectors in the agriculture industry to help us understand where there is a need for reform.

2. The first set of regulations were introduced for the dairy sector in 2024. During their development, a 12-week consultation was conducted in the pig sector in July 2022 seeking the views of producers and purchasers about issues relating to fairness and transparency and potential measures to improve them.

3. Consultation responses clearly demonstrated the need for regulatory intervention in the pig sector, and further engagement with industry was conducted to develop proposals which were proportionate and practical. We have sought to protect and promote practices that are good for producers, purchasers, and consumers, and have only proposed regulations where there is potential for unfair practices.

4. The Fair Dealing Obligations (Pigs) Regulations 2025 (“FDOP25”) are being created using powers in the Agriculture Act 2020 (section 29) to impose new obligations on business purchasers of agricultural products in relation to contracts they make.

5. FDOP25 will come into force in the UK on 13 August 2025, at which point they will apply to all new contracts made for the purchase of pigs from a qualifying seller. There will be a further transition period of 12 months for existing agreements, after which all such contracts will need to be compliant with FDOP25 by 13 August 2026.

Summary

6. FDOP25 is intended to make pig purchase agreements fairer and clearer. They apply to contracts to purchase pigs that are arranged directly between “purchasers” (such as pig processors and abattoirs) and “qualifying sellers”. For current purposes, the “qualifying seller” definition includes any person, whether within, our outside, the UK, who is a farmer or other primary producer, of pigs, or a purchaser of pigs from more than one qualifying seller who does not carry out any processing of the product before selling it on (“a produce aggregator”).

7. We want to make sure both parties to a pig purchase contract know their rights and responsibilities in advance. To achieve this (where the qualifying seller has not decided to disapply the regulations – see below), contracts for the purchase of pigs are required to be in writing by default and include the following as a minimum:

a) Clear terms around pricing, either offering a set price that a qualifying seller will be paid per quantity of pigs (fixed price) or details on the ways that the price will be determined (variable price) or a combination of both. When a variable price is used, FDOP25 allows qualifying sellers to request a written explanation of how the price was determined, unless the price is calculated using a formula that is inherently transparent and verifiable by the qualifying seller. Accordingly, the regulations state that a written explanation is not required where at least 97.5% of the price per quantity of pigs is determined by objective factors that are quantifiable and accessible to both the qualifying seller and the purchaser.

b) The prohibition of unilateral changes to the pig purchase contract, meaning any changes to a contract must be agreed by both the qualifying seller and the purchaser.

c) Clear terms on the length of pig purchase contracts and the process of termination:

• a) Pig purchase contracts must include a start date of supply, if this is different to the day the contract is signed. From there, they must outline the length of time supply will last. This can be a fixed duration or on an evergreen basis.

• b) Rules of termination will ensure stability, ensuring contracts include applicable notice periods for qualifying sellers and purchasers to terminate a pig purchase contract of 12 months or longer. Qualifying sellers will also have the right to immediately and unilaterally terminate any pig purchase contract where certain conditions are met.  More detail on this is provided in the “immediate termination” section below.

d) Certainty around the volumes that qualifying sellers agree to supply and the quantity of pigs that purchasers agree to buy (agree to collect or have delivered to them), as well as the remedies that are available for failure to meet these quantities.

e) A dispute resolution mechanism so that qualifying sellers can raise issues with purchasers relating to the pig purchase contract. If necessary, unresolved disputes about whether FDOP25 has been complied with can be escalated by qualifying sellers to The Agricultural Supply Chain Adjudicator (ASCA). The ASCA is responsible for enforcing the Regulations on behalf of the Secretary of State and will consider all relevant complaints fairly and impartially (please see The Agricultural Supply Chain Adjudicator statutory guidance for more detail on enforcement).

f) All contracts must include an express term that requires the purchaser to act in good faith in relation to the contract.

8. For sales that do not require these key provisions, FDOP25 also provides for a notice to disapply. This functions as an opt out from the regulations and allows qualifying sellers to notify purchasers in writing that a specific sale or set of sales will be exempt from the regulatory requirements.

Please note: Non-performance of contractual obligations may constitute a breach of contract but not a breach of FDOP25. As such, please seek separate independent legal advice in this situation as the ASCA is only able to deal with cases where there has been a breach of FDOP25. 

Important: This guidance is intended to help industry understand the new rules, however, businesses should always seek their own independent legal advice concerning compliance with FDOP25 and possible contractual disputes. 

New and existing contracts

9. From 13 August 2025, when FDOP25 comes into force, all new pig purchase contracts must comply with these rules. To allow industry time to adjust existing arrangements, FDOP25 includes a further 12-month transition period until 13 August 2026 for pig purchase contracts which were already in place before FDOP25 came into force (‘existing’ contracts) to become compliant.  If pigs are supplied under such contracts after the transition period expires, those contracts must comply with FDOP25.

10. While it is usually clear what constitutes a ‘new’ or an ‘existing’ contract, there are some cases where this may be unclear. While we recommend that all parties seek their own legal advice, the status of contracts during the transition period could be as follows:

Scenario 1: New pig purchase contracts entered into on or after 13 August 2025

Where a qualifying seller and a purchaser enter into a new supply agreement on or after 13 August 2025, (and no notice to disapply is issued) they will need to agree a contract in writing that meets the requirements of FDOP25. 

Scenario 2: Existing pig purchase contracts that remain unchanged after 13 August 2025

Where the parties have an existing pig purchase contract that was in place before 13 August 2025, they can continue to make supplies under that contract until 13 August 2026, after which point, the contract will need to comply with the FDOP25. We anticipate that industry will use this transition period to ensure that their existing contracts meet the requirements of FDOP25. By 13 August 2026 all pig purchase contracts must be compliant. 

Scenario 3: Existing pig purchase contracts that change between 13 August 2025 and 13 August 2026

It is possible that variations that are made to existing pig purchase contracts could constitute a new contract and bring it within scope of the requirements in FDOP25 before 13 August 2026. We therefore recommend that each party seek their own legal advice on whether any changes being made to the supply arrangement create a new pig purchase contract. This will ensure that both sides are clear about whether the existing pig purchase contract continues to operate or has, in effect, been rescinded and replaced. From the end of the transition period, 13 August 2026, all pig purchase contracts will be covered by the terms of FDOP25.

Important: When regulatory changes introduce new compliance requirements, such as with FDOP25, all contracts are expected to be fully compliant by the 13 August 2026 end of transition date. Parties on both sides of the agreement may wrongly interpret the transition date as an opportunity to exit contracts earlier than the existing contractual notice periods allow. FDOP25 coming into force does not have the effect of automatically terminating or overriding existing contractual notice periods and, therefore, does not, provide a unilateral release from existing termination obligations.

In situations where parties intend to exit agreements, discussions should be conducted in good faith and with due regard to agreed contractual obligations. Where existing notice periods extend beyond the transition date, and early termination has not been mutually agreed, businesses are strongly advised to seek independent legal guidance, as the appropriate course of action will depend on the specific terms of the contract.

Pig purchase contracts (Parts 2 & 3 of FDOP25)

Requirement to use a written pig purchase contract

11. We are making it a requirement for pig purchase contracts entered into on or after 13 August 2025 to be in writing, to achieve greater transparency.

12. For qualifying sellers and purchasers who have an existing supply arrangement that was entered into before 13 August 2025, they must have a written pig purchase contract that complies with the requirements of FDOP25 by 13 August 2026, subject to any notice to disapply issued by the qualifying seller for any of the purchases under that contract. This can either be achieved by varying the terms of an existing written pig purchase contract to bring it into compliance or by terminating an existing non-compliant pig purchase contract and entering into a new compliant one. Where a written pig purchase contract is not already in place, a compliant written pig purchase contract will need to be agreed and signed by all parties.

13. Parties are advised to seek independent legal advice to ensure their pig purchase contracts are compliant with FDOP25 as compliance can be achieved in different ways depending on current supply arrangements:

a) Existing Written Contract that is fully compliant with the FDOP25 Where a fully compliant written contract is already in place there is no need for any changes to the contract.  

b) Existing Written Contract that is partly compliant with FDOP25

Where a partly compliant written contract is already in place before 13 August 2025 a fully compliant contract must be agreed between the parties in writing by the 13 August 2026. This can be achieved by agreeing amendments to the existing contract in writing, or by entering into a new fully compliant contract.  

c) Existing Verbal/Informal Contract.

Where a verbal supply agreement is in place before 13 August 2025 a new, written contract that is compliant with FDOP25 must be agreed and signed by 13 August 2026.  

d) No existing contract

Where a new pig purchase contract is entered into on or after 13 August 2025, it must be in writing and fully comply with FDOP25.

Notice to disapply the regulations

14. There are instances where these regulations may not be appropriate, such as sales on the spot market, so qualifying sellers can give a notice to disapply the regulations for these types of transactions. Issuing a ‘notice to disapply’ means that the Regulations, in their entirety, no longer apply to the sales in question.

15. To arrange a sale, or set of sales, outside of the regulations the qualifying seller must provide a ‘notice to disapply’ the regulations to the purchaser notifying them of their intent. This notice must be in writing, either in a physical document or a digital document, and be issued in respect of:

a) Specified purchases; or b) All purchases within a specified time.

to which the qualifying seller has decided the regulations will not apply.  As a result, and to reduce the risk of any future confusion or disputes between the parties, the applicable purchases or time should be set out as precisely as possible.

16. A qualifying seller can withdraw a notice to disapply at any point before the contract (through which the purchases specified in the notice will be made) has been entered into. However, once that contract has been entered into, the notice to disapply remains in effect for those purchases and cannot be reversed.  At that point, if a qualifying seller wishes the regulations to apply to the purchases, they should seek their own independent legal advice on the best way of terminating the current contract and agreeing a new one to which the Regulations will apply.

Format and duration of pig purchase contracts

17. A pig purchase contract must be in writing and signed by both parties to comply with the FDOP25. This can be either a signature to a physical document or a digital document with an electronic signature. The following types of contracts are permitted:

a) Evergreen contracts

These contracts run on an ongoing basis until one party decides to terminate. The procedure for the termination of the contract, including notice periods which each party is required to give, must be set out in the contract. 

b) Fixed-Duration contracts

These contracts must have a pre-agreed point in time when they will expire. The way that this will be structured must be agreed by both parties and can be a specific date in the future when the agreement will end or a length of time that the agreement will remain in place. As with evergreen contracts, fixed duration contacts of more than 12 months must set out the procedure for the termination of the contract

18. The contract must state whether it is a fixed-duration or evergreen contract. The contract must also specify the date on which the obligation to supply pigs begins if that date is different from the date on which the contract is signed.

Pricing & payment (Part 4 of FDOP25)

Payment terms

19. Under FDOP25, contracts need to set out how and when payments will be made. All contracts must include the method and frequency of payment, and must specify: - The first date payment will be made. - The frequency with which payment will occur. - The method by which payment will be made.

Payment structures 

20. FDOP25 requires pig purchase contracts to use: - a fixed price, or - a variable price, or - a combination of the two.

21. A “fixed price” is a price set out in the pig purchase contract that is expressed per quantity of pigs and will be paid by the purchaser to the qualifying seller for the pigs supplied under the contract.

22. A “variable price” is a price per quantity of pigs that is fixed at the time the pig purchase contract is made but is determined in accordance with, or by reference to, factors set out in the contract.

23. Under either approach, the price must be expressed “per quantity of pigs”. As, in this context, words in the plural include the singular and vice versa, this means that prices can be expressed per pig, per kilogramme of pig or any other objective metric.

Fixed price contracts  

24. More than one fixed price may be used during the life of the contract, but if the fixed price is to change within the duration of the contract, the contract must set out the start and end dates when each of the fixed prices will apply.

Fixed price exceptional market conditions

25. Even where a fixed price has been agreed, exceptional market conditions may require the price to be reviewed during the agreement. To protect both parties and ensure this happens fairly, the contract must set out a procedure by which a fixed price may be reviewed where exceptional market conditions occur. The contract must also make clear what constitutes exceptional market conditions under which a fixed price can be reviewed.

26. The procedure for the price review must provide that, where requested by the qualifying seller, the purchaser must invite the qualifying seller to enter a discussion on the proposed price changes within 30 days.

27. As part of this process, both parties must then review the price payable and consider whether a change is needed. Where there is agreement between parties, the contract must be amended in writing to reflect the new price. Parties to the contract are advised to include provisions which set out what will happen in the event an agreement cannot be reached.

Variable price contracts

28. Variable price contracts are already common in the industry. However, the regulations now require that the factors used to determine the price of pigs be clearly outlined and agreed upon in advance by both qualifying sellers and purchasers.

29. Where a pig purchase contract uses a variable price (whether or not in combination with a fixed price) it must do so in accordance the following requirements:

a) the contract must set out the factors that will be used to calculate the pig price (for example, as part of a formula), or to which the purchaser must have due regard when determining the pig price.

b) the contract must outline the periods of time that each set of factors will apply, including the start and end dates. There can either be one set of factors that apply for the whole duration of the contract, or different factors that apply at different times.

c) the contract must include information on how often the price is to be determined.

30. The factors used to determine the pig price can include a range of private or public metrics.

For example, contracts could state the price to be paid is the Standard Pig Price (SPP), a measure of Cost of Production (COP) (private or public), or to be determined in accordance with a combination of these factors and others.  

31. A contract can also specify that certain factors are weighted more heavily when determining the price.

When a variable price changes

32. FDOP25 requires that pig purchase contracts must outline how often the price per quantity of pigs will be determined.

33. After a price has been determined, FDOP25 gives the qualifying seller a right to request a written explanation of how the price was determined. Where the price was determined by the purchaser this must include how the factors to which the purchaser had due regard influenced the price.

34. The qualifying seller must make the request for the written explanation, in writing to the purchaser. The purchaser must provide the explanation within seven days of the day that the request was given. Qualifying sellers can only request this written explanation once for every time the price is determined.

35. This provision does not apply when the price is determined according to factors that are already largely transparent and accessible. Specifically, if 97.5% or more of the price per quantity of pigs is determined using a formula in the contract which uses objective factors that are quantifiable and mutually accessible (i.e. to both parties), then the qualifying seller does not have the right to request a written explanation.

36. Mutually accessible factors include those a qualifying seller is able to verify for themselves, for example publicly accessible metrics (like the Standard Pig Price) or those shared between qualifying sellers and purchasers already (like Cost of Production metrics which are either publicly available or are calculated using data which is available to the qualifying seller).

Independent verification for variable price

37. Some of the factors purchasers use to determine their pig price may be commercially sensitive, such as onward sales prices or profit margins. Where this is the case, purchasers are not required to disclose this information to the qualifying seller.

38. However, where the parties have agreed to use such confidential information to determine the pig price, the pig purchase contract must include a procedure by which qualifying sellers can refer the explanation of how the price was determined to an independent third party who can verify that the confidential information is accurate and supports the explanation of the price given. This is to ensure transparency whilst also protecting the commercially sensitive data of their purchasers.

39. The purchaser must cooperate with the independent third party and provide such information and documentation as reasonably requested by them.

40. The independent person can be any individual or organisation agreed by both parties, although we would expect this to be a professional with relevant experience that would enable them to verify the confidential information, such as accountants, solicitors, or business consultants.

41. The pig purchase contract must also set out how the costs of the independent person will be apportioned between the parties.

Quantity to be supplied (Part 5 of the FDOP25)

42. FDOP25 introduces rules about what qualifying sellers and purchasers can agree regarding the quantity of pigs that will be supplied.

43. A pig purchase contract must therefore include the quantity of pigs that will be provided within a given period of time.

44. A pig purchase contract can specify tolerances i.e. it can outline the maximum and minimum quantities that will be accepted, including an acceptable percentage variance from the specified amounts.

45. Where the quantity of pigs to be supplied may change throughout the course of the pig purchase contract, the contract must outline the process by which, and the frequency by which, this can be arranged.

46. The contract must also set out the remedies available to the purchaser where the quantity of pigs supplied is below the minimum quantity specified for that period . Where supply is lower than expected, there could be several reasons and the contract could include different remedies for different scenarios.

Miscellaneous (Part 6 of the FDOP25)

Collection or deliveries of pigs

47. Under FDOP25, the pig purchase contract must set out the arrangements for the collection or the delivery of pigs. Specifically, it must set out whether:

a) Pigs will be collected from the qualifying seller by, or on behalf of, the purchaser.

b) Pigs will be delivered to the purchaser by, or on behalf of, the qualifying seller.

48. The pig purchase contract must outline when and how frequently these collections or deliveries will occur.

49. The contract must also set out the remedies available to the qualifying seller and the purchaser where the collection or delivery of pigs fails to comply with the terms of the pig purchase contract. For example, when a purchaser does not accept or collect the agreed quantity of pigs that the qualifying seller has agreed to provide.

Force majeure

50. Under FDOP25, all pig purchase contracts must include a provision that sets out the effect on the qualifying seller and purchaser when certain acts, events or circumstances occur that were unforeseeable and unavoidable and prevent either party from being able to fulfil their obligations under the contract (‘Force Majeure events’).

51. The specific acts, events or circumstances which will constitute a force majeure event in each pig purchase contract is a matter to be agreed between the parties and must be written into the contract.

52. Examples could include severe disease outbreaks on a farm, extreme weather events or natural disasters.

Notices under a pig purchase contract

53. FDOP25 requires that pig purchase contracts set out how notices must be given under the contract. The contract must require that any such notices be in writing and sent either by email or by a method of post that requires the recipient to sign on receipt. The contract must also provide that, where the notice is sent by post, it must be properly addressed and pre-paid.

54. The contract must provide that service of a compliant notice will be deemed to take effect:

a) where email is used, at the time at which the notice would be delivered in the ordinary course of using the email service, or,

b) where the post is used, at the time at which the notice would be delivered in the ordinary course of post.

55. The contract must state that the address for service by post for the parties is their ordinary business address unless a party specifies an alternative address. If an alternative address is to be used, this must be included in the contract.

Variation of terms

56. A pig purchase contract must provide that any variation to its terms must be agreed in writing between the purchaser and the qualifying seller.

Dispute resolution (Part 7 of FDOP25)

57. FDOP25 requires that a dispute resolution procedure must be included in every contract setting out how a qualifying seller may make a complaint to the purchaser relating to their pig purchase contract.

58. The dispute resolution procedure must set out:

a) That the qualifying seller must make the complaint to the purchaser by giving a notice in writing.

b) The contact details of the person to whom the qualifying seller’s notice should be given.

c) That once a purchaser has received the written complaint, they will investigate and take all reasonable steps to resolve the complaint.

Escalating a dispute

59. It is hoped that the majority of the problems that might arise in relation to pig purchase contracts will be able to be resolved between the parties through the dispute resolution procedures set out in the contracts.

60. However, where there is a dispute about a suspected breach FDOP25 that remains unresolved after 28 days of being raised with the purchaser under the dispute resolution procedure, qualifying sellers may refer the complaint for investigation by the Agricultural Supply Chain Adjudicator.

Termination (Part 8 of FDOP25)

61. FDOP25 provides rules about the provisions on termination that must be included in pig purchase contracts.

Termination for evergreen or fixed contracts of 12 months or more

62. All pig purchase contracts, which are evergreen or have a fixed duration of longer than 12 months, must set out a process in accordance with which the contract can be terminated (the ‘termination process’).

63. The termination process must specify the period of notice that is required from either the qualifying seller or the purchaser to terminate the contract without the consent of the other party.

64. The termination process must specify that any notice given to terminate a contract must include the date that the contract will be terminated.

Immediate termination

65. All pig purchase contracts must also provide that the qualifying seller can immediately terminate the pig purchase contract by giving the purchaser written notice:

a) Where the purchaser is insolvent.

b) Within 14 days of the qualifying seller becoming aware of the purchaser materially breaching the contract.

c) Where the purchaser fails to make a payment in accordance with the pig purchase contract and the qualifying seller gives notice to the purchaser about that failure; within 21 days of that notice being given if the payment was not made within 7 days of that same notice.

d) Within 14 days of the third occasion on which the purchaser fails to make a payment in accordance with the pig purchase contract.

e) Within 14 days of the death of a person specified in the pig purchase contract as someone whose death enables the pig purchase contract to be terminated.

f) Within 14 days of a requirement to pay a civil penalty or compensation being imposed on the purchaser under FDOP25.

Additional provisions

66. FDOP25 prohibits changes to the pricing method or price paid for pigs being made by the purchaser because of a termination notice being issued by the qualifying seller.

67. Further, FDOP25 prohibits any rule being included within a pig purchase contract that the termination notice can only be issued by the qualifying seller on a specific day.

Important: In line with the guidance provided and the recommended approach for businesses, both parties should seek independent legal advice when terminating a pig purchase contract.  

Glossary of terms

In this guidance:

• “pig purchase contract” means a contract made by a purchaser for the purchase of pigs from a qualifying seller;
• “the parties” in relation to a pig purchase contract, means the purchaser and the qualifying seller who are party to the contract;
• “purchaser” means, in relation to the purchase of pigs, a person who purchases pigs in the course of carrying on a business that includes purchasing products of that kind;
• “qualifying seller” means a qualifying seller falling within section 29(3)(b) of the Agriculture Act 2020;
• “fixed-duration contract” is a pig purchase contract that will terminate on the expiry of a specific period or on a specified date;
• “quantity of pigs” means the volume of pigs that are to be supplied. This can be a number of pigs or a volume of pigs. For example, the weight that is to be supplied in kilograms or another metric;
• “fixed price” is a price, set out in the pig purchase contract, that is expressed per quantity of pigs and will be paid by the purchaser to the qualifying seller for pigs supplied under the contract;
• “evergreen contract” is a pig purchase contract that will continue until one of the parties terminates it;
• “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 in accordance with, or by the purchaser, with reference to factors set out in the pig purchase contract.