Guidance

Statutory guidance for the Fair Dealing Obligations (Pigs) Regulations 2025

Updated 25 June 2025

Introduction

1. This guidance is provided by the Secretary of State for Environment, Food and Rural Affairs under Regulation 21 of The Fair Dealing Obligations (Pigs) Regulations 2025 (FDOP25).  Any reference to a regulation in this guidance, is a reference to a regulation in FDOP25.

2. The guidance covers the imposition by the Agricultural Supply Chain Adjudicator (ASCA), acting on behalf of the Secretary of State, of a civil penalty and/or compensation under Regulation 20(1) in the circumstances that there has been a failure to comply with a requirement under FDOP25.

3. The ASCA must have regard to this guidance when exercising powers under Regulation 20(1).

4. Accordingly, under Regulation 21, this guidance sets out:

5. The matters to be taken into account in determining the amount of the civil penalty and/or compensation payable for infringements of FDOP25 where the ASCA decides to impose a penalty and/or award compensation under Regulation 20(1).

6. The rights of the purchaser and qualifying seller to make representations under Regulation 23.

7. The purchaser and the qualifying seller’s right to file an appeal with the First-tier Tribunal under Regulation 25 against a decision by the ASCA to impose a requirement under Regulation 20(1).

Background

1. The Agriculture Act 2020 introduced powers to allow the making of regulations that can protect “qualifying sellers” from unfair treatment within the supply chain. 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 further processing of the product (“a produce aggregator”).

2. FDOP25 imposes obligations on purchasers in relation to contracts they make with qualifying sellers for the purchase of pigs. FDOP25 will have effect in the UK from 13th August 2025.  At this point FDOP25 will apply to all new contracts made for the purchase of pigs from a qualifying seller, unless the qualifying seller gives the purchaser a notice to disapply, or “opt out” from, the FDOP25 for particular purchases or for a particular period.  A transition period of 12 months will apply for active contracts entered into before FDOP25 came into effect.  From 13th August 2026 onwards, all such contracts will similarly be subject to FDOP25 (again unless the qualifying seller chooses to opt out from FDOP25 as described above).

3. The Agricultural Supply Chain Adjudicator (ASCA), acting on behalf of the Secretary of State, will carry out the enforcement functions under FDOP25.

4. The ASCA has the power to investigate relevant complaints under FDOP25 that are referred by qualifying sellers in relation to pig purchase contracts. The ASCA may require parties to the pig purchase contract to submit evidence relating to the relevant complaint and, should either party fail to provide the requested information, may bring civil proceedings to obtain the evidence. If either party do not provide the requested evidence, a negative inference may also be drawn by the ASCA in terms of this failure. Where the ASCA finds that a purchaser has failed to comply with a requirement under FDOP25, the ASCA may require the purchaser to pay either, or both, a civil penalty and compensation.

5. It is important to ensure that penalties imposed are fair, proportionate, reasonable and not excessive. In assessing the appropriateness and proportionality of the penalty, the ASCA will have regard to the facts and circumstances of the individual case. While the ASCA is not bound by previous decisions, it will seek to ensure there is consistency in its approach.

Enforcement of FDOP25

6. Under Regulation 20, where the ASCA, on behalf of the Secretary of State, finds that a purchaser has failed to comply with a requirement under FDOP25, he may require the purchaser to pay either or both a civil penalty and compensation payment.

7. Under Regulation 23, the purchaser has 28 days from the date they receive the notice of intent from the ASCA to make written representations in relation to the proposed requirement to impose a civil penalty and/or compensation. Where the ASCA intends to impose a requirement to pay compensation on a purchaser, the qualifying seller can make representations relating to the amount, within 28 days of receipt of the notice of intent.

8. Under Regulation 25, a purchaser on whom a requirement to pay a civil penalty and/or compensation has been imposed can appeal against the decision to require a civil penalty and/or compensation to be paid; or the amount of the civil penalty and/or compensation they have been ordered to pay. A qualifying seller who referred the complaint to the ASCA that resulted in the decision to impose a civil penalty and/or compensation can appeal against a decision not to require the purchaser to pay either a civil penalty and/or compensation or the amount the purchaser has been ordered to pay the qualifying seller.

9. Regulation 21 requires the ASCA to prepare and publish guidance as to how the appropriate amount of a civil penalty or compensation is to be determined as well as the rights of the purchaser and the qualifying seller to make representations and to appeal against a decision.  The ASCA must have regard to the guidance when exercising the powers to impose a civil penalty and/or compensation.

10. As set out in Regulation 20, the civil penalty may not exceed 1% of the purchaser’s turnover, as further described below.

11. There is no upper limit set by the FDOP25 on the amount of compensation that may be imposed under Regulation 20.

12. A civil penalty and/or compensation may be imposed in respect of each and every failure to comply with FDOP25.

13. This guidance will continue to be reviewed and updated as required by Regulation 21(3).

Matters that will be taken into account when calculating the amount of civil penalty or compensation payable

14. Where the ASCA finds that a purchaser has failed to comply with FDOP25, the ASCA may require the purchaser to pay either a civil penalty into the Government’s consolidated fund and/or pay compensation to the qualifying seller.

15. This section sets out the matters that the ASCA will take into consideration when deciding the amount of civil penalty and compensation.

Part A - Civil Penalties

16. When deciding the amount of any civil penalty, the ASCA will consider the nature and circumstances of the breach on a case-by-case basis, taking into account:

a. The seriousness of the breach including:

• the loss caused to the qualifying seller
• the duration of the breach
• the number of breaches relating to the pig purchase contract complained about that have been found
• any potential gain that the ASCA estimates was made by the purchaser, or potential loss which the ASCA estimates was avoided by the purchaser, as a result of the breach
• whether the breach was intentional or whether the purchaser failed to take reasonable steps to avoid or prevent the breach
• whether the purchaser’s ownership and/or senior management were aware (or should have been aware) of the breach
• any previous breaches of FDOP25 by the purchaser

b. Any mitigating circumstances that could reduce the penalty, including:

• remedial steps taken by the purchaser to rectify the breach, as well as to avoid future breaches, including when these steps were taken and whether they were taken on the purchaser’s own initiative
• the purchaser’s cooperation with the investigation
• the purchaser’s track record of compliance with FDOP25

c. Any other relevant factors deemed appropriate to the case.

17. The ASCA will endeavour to ensure that any penalty imposed is proportionate so that a fair balance is struck between the seriousness of the breach and the harm caused alongside the impact of any penalty on the purchaser and other relevant parties. This would include consideration of the impact that the imposition of the penalty would have on the financial viability and sustainability of the purchaser, particularly where this may impact their employees or other qualifying sellers, they have contracts with.

18. The ASCA will also consider the need to deter the purchaser who committed the breach, or others, from committing further breaches going forward by ensuring that the value of the penalty is not outweighed by the financial gains made by the purchaser. The ASCA will also look at the effect of any previous action taken in respect of similar breaches, and the extent to which this has improved compliance with FDOP25.

19. As set out in regulation 20(3), the maximum amount of any civil penalty is 1% of the purchaser’s turnover. This would be based on the purchaser’s applicable turnover for the business year preceding the date of the decision to impose a penalty.

20. A business year is a period of more than six months in respect of which the purchaser published accounts or prepared accounts. Where the business year preceding the date of the decision notice did not equal twelve months, the applicable turnover for that business year will be divided by the number of months in that business year and then multiplied by 12.

21. If there was no preceding period of more than 6 months in respect of which the purchaser published or prepared accounts, the purchaser’s turnover would be the applicable turnover for the 12 months preceding the month in which the notice of the decision to impose a penalty was given. If the purchaser only has turnover for a period of less than twelve months, the applicable turnover in that period would be divided by the number of months in that period and multiplied by 12.

22. The applicable turnover is the sum of:

• all amounts derived by the purchaser from the provision of goods and services falling within the purchaser’s ordinary activities in the United Kingdom; and
• all other amounts received by the purchaser in the course of the purchaser’s ordinary activities in the United Kingdom by way of gift, grant, subsidy or membership fee, after deduction of trade discounts, value added tax and other taxes based on the amounts so derived or received.

Part B – Compensation

23. When calculating any compensation payable, the ASCA will look to put the qualifying seller back in the position they would have been in had the purchaser not breached the relevant provision of FDOP25.

24. Compensation will be decided on a case-by-case basis and will normally be determined based on the amount of financial loss suffered due to the breach.

25. The ASCA will assess the amount of compensation sought by the qualifying seller, using all available evidence of their financial loss provided during the investigation process. The ASCA can also determine compensation in cases where it has not been raised by the qualifying seller, using evidence compiled through the investigation process.

26. The qualifying seller should set out the basis on which they have calculated the amount of compensation sought in their complaint and, where this includes any interest, the rate of interest they have used.

27. Please note: Tax may be payable on any ordered compensation payments and interest accrued on this. HMRC provides detailed guidance on the taxation of various types of compensation payments. For further information, you may want to consider seeking professional tax advice.

The ability to make representations

28. If the ASCA intends to impose a requirement on the purchaser to pay a civil penalty and/or compensation a written notice (“notice of intent”) will be sent to both parties setting out the breach which the ASCA considers has been committed, the evidence being relied upon and the civil penalty and/or compensation the ASCA intends to impose, along with details on how to make representations.

Making representations - purchasers

29. A purchaser to whom a notice of intent is given may make written representations in relation to the proposed requirement to pay a civil penalty or pay compensation. These representations can be about the alleged breach of FDOP25 as well as the amount of the penalty and/or compensation being proposed. This could include information on the steps that have been taken to comply with FDOP25 or the impact the proposed penalty would have on the purchaser’s business.

Making representations - qualifying sellers

30. Where the ASCA proposes to require the purchaser to pay compensation to the qualifying seller, the qualifying seller can make written representations in relation to the amount of the proposed compensation.

Time limit to make a representation

31. Both purchasers and qualifying sellers have 28 days from the day they received the notice of intent to make written representations. If you do not make representations within this time limit, the ASCA will proceed to make decisions based on the information and evidence set out in the notice of intent.

How to make a representation

32. The representation must be made in writing. Written representations should be sent:

By email to: asca@defra.gov.uk

By post to:

The Agricultural Supply Chain Adjudicator
Department for Environment, Food and Rural Affairs
Seacole Building
2 Marsham Street
London
SW1P 4DF

Who considers the representation

33. The ASCA will consider the representations when making a final decision on whether to impose a requirement to pay a civil penalty and/or compensation.

34. Where the ASCA decides to impose a requirement to pay a civil penalty or compensation, it may be the one proposed in the notice of intent, or a different requirement, depending on the final decision of the ASCA in light of any representations made.

How will I find out about the outcome?

Purchasers

35. The ASCA will send a written notice (“notice of decision”) to the purchaser.

36. Where the decision is to impose a requirement to pay a civil penalty or compensation under regulation 20(1), the notice of decision will set out:

• the requirement being imposed and the amount of the civil penalty and/or compensation to be paid in respect of each breach;
• the reasons for imposing the requirement;
• an explanation as to how the amount has been calculated;
• how payment may be made;
• that payment is due within 28 days of the receipt of the notice of decision;
• information about the purchaser’s right to appeal against the imposition of a requirement under regulation 25(1); and
• that where the Secretary of State decides to impose a civil penalty, that the Secretary of State is entitled to recover any unpaid civil penalty as a debt; or

37. Where the decision is not to impose a requirement to pay a civil penalty or compensation under regulation 20(1), the notice of decision will set out:

• that decision; and
• the reasons for reaching the decision.

Qualifying sellers

38. The ASCA will also send a copy of the notice of decision to the qualifying seller, before the expiry of 7 days beginning with the day after the day on which the ASCA gives a notice of decision to the purchaser.

39. Where the ASCA requires the purchaser to pay compensation to the qualifying seller or has decided not to impose a requirement for the business purchaser to pay a civil penalty or compensation, the written notice will also set out the qualifying seller’s right to appeal under regulation 25(2).

What happens after the notice of decision has been received?

40. If a purchaser is required to pay a civil penalty and/or pay compensation under regulation 20(1), they must do so within 28 days of receiving a notice of decision under paragraph 24(4).

41. If either the purchaser or the qualifying seller decides to appeal against the decision, the time limit for payment of the civil penalty and/or compensation is paused until the appeal is concluded.

The right to appeal a decision

42. Regulation 25(3) sets out the right to appeal the decision made by the ASCA to the First-tier Tribunal in the circumstances set out below. An appeal may be determined by the First-tier Tribunal having regard to matters of which the ASCA was unaware. A notice of appeal must be sent or delivered to the Tribunal so that it is received within 28 days of the date on which the notice of decision was received.

What can I appeal about?

Purchasers

43. The purchaser on whom a requirement to pay a civil penalty or compensation has been imposed under FDOP25, can appeal against:

• the decision to require a civil penalty and/or compensation to be paid; or
• the amount of the civil penalty and/or compensation they have been ordered to pay.

Qualifying sellers

44. The qualifying seller who referred the complaint to the ASCA that resulted in the decision to impose a civil penalty and/or compensation, can appeal against:

• a decision not to require the purchaser to pay either a civil penalty or compensation; or
• the amount of any compensation the purchaser has been ordered to pay to the qualifying seller.

What happens to the time limit on paying a civil penalty and/or compensation whilst I’m appealing?

45. The 28-day limit for civil penalties and/or compensation to be paid is paused until the appeal is concluded.

46. If, following an appeal, the First-tier Tribunal upholds the decision to impose a civil penalty and/or compensation, the purchaser must make the payment before the expiry of 28 days, beginning with the date of the First-tier Tribunal’s judgment, minus the number of days that had passed between the date the purchaser received the notice of decision from ASCA and the date on which the appeal was filed.

Who to appeal to

47. Any appeal made under FDOP25 must be made to the First-tier Tribunal (General Regulatory Chamber). 48. For information on how to appeal see the First-tier Tribunal (General Regulatory Chamber) website.