IN Brief:
- The Agricultural Supply Chain Adjudicator has published its second annual report covering dairy and pig contract practices and confidential complaints.
- Interventions led dairy processors to amend contract clauses concerning surplus milk sales, required provisions, pricing and restrictions on producers’ activities.
- Existing pig supply contracts came within the full regulations in August 2026, and the adjudicator is preparing for possible future responsibilities in the egg sector.
The Agricultural Supply Chain Adjudicator has secured amendments to dairy purchasing contracts after producers raised concerns in confidence. Richard Thompson’s second annual report, published on 3 November, describes interventions over surplus milk sales, missing statutory terms and proposals affecting prices and quality assurance. His office is also working with pig producers and purchasers after the final transition deadline for that sector’s fair-dealing regulations passed in August.
One dairy supplier was concerned that proposed terms could restrict the sale of surplus milk to another buyer. The adjudicator’s office took the issue to the processor without disclosing the producer’s identity. The processor subsequently revised and reissued its agreement to make clear that surplus milk could be supplied elsewhere. This was a change to contractual permissions, not a finding that a milk processor had stopped production or withheld supply.
A separate producer raised a complaint about missing terms required under the Fair Dealing Obligations (Milk) Regulations 2024. After direct discussions with the processor had failed to settle the problem, the adjudicator intervened and the processor amended its agreement. It also committed to updating contracts with other producers. The office says the matter was resolved without a prolonged formal complaint process, illustrating how a contractual problem can be corrected before a full enforcement decision is needed.
In another case, several dairy farmers approached the office over proposed changes relating to prices, quality-assurance requirements and restrictions on processing their own milk. The adjudicator raised the concerns anonymously and the processor reconsidered parts of the proposals, clarified information and agreed to further engagement. The accounts do not name the processors or establish that the same terms are widespread across the industry; they demonstrate specific interventions described in the adjudicator’s report.
A milk processor depends on predictable collection volumes, quality specifications and purchasing terms, while the producing farm needs to understand how delivered milk is priced and accepted. Purchase contracts set out those obligations and the process for changing them. Where pricing mechanisms or quality-assurance rules are unclear, decisions about supply, processing commitments and payments can become disputed. The report records interventions about commercial terms, not findings of unsafe milk or failures in factory hygiene.
The Fair Dealing Obligations (Milk) Regulations 2024 applied to new milk purchase contracts from 9 July 2024 and to existing qualifying agreements from 9 July 2025, following a 12-month transition. They establish requirements for contracts and related trading practices. The adjudicator can consider complaints within the statutory remit and may impose civil penalties or require compensation where the legal conditions are met. The anonymised contracts in the report were changed through intervention and should not be described as cases where formal penalties were imposed.
The Fair Dealing Obligations (Pigs) Regulations 2025 began applying to new pig purchase contracts on 13 August 2025. Existing contracts reached the end of their 12-month transition on 13 August 2026, subject to the rules’ provisions allowing qualifying sellers to opt out in specified circumstances. The adjudicator has engaged with pig producers, purchasers and trade organisations to explain the obligations and collect concerns about contractual practices. The annual report does not identify a pig processor that has been formally sanctioned.
The report describes falling farm-gate milk prices from late 2025, followed by a recovery into mid-2026 while producers continued to face input-cost and weather pressures. In the pig sector, weaker prices and supply imbalances prompted some processors to seek reductions in animal numbers. Those conditions can make the timing of price revisions, volume commitments and contract changes especially contentious. Fair-dealing rules govern specified elements of the purchasing relationship; they do not guarantee particular prices or volumes.
Farmers have told the adjudicator that complaining can jeopardise commercial relationships, and his office has used confidential enquiries, producer meetings and sector roundtables to identify cases. It also provided evidence to Parliament’s Environment, Food and Rural Affairs Committee about contract fairness, market transparency and barriers to making complaints. Anonymous engagement enabled at least one processor to amend terms without being told which individual farmer raised the issue.
The adjudicator accepts confidential contact and requests for advice as well as formal statutory complaints. Contacting the office can lead to discussion with a purchaser before an enforcement case is opened, and some wider commercial disagreements may not fall within the regulations. This distinction is material to the examples in the annual report: the corrected contract clauses are documented outcomes of informal intervention rather than published determinations following a contested enforcement process.
Further work is planned with dairy and pig purchasers and producers, including additional case studies and discussion of industry-led codes. A dairy roundtable produced a commitment to pursue an industry-wide code, while a pig-sector roundtable in September 2026 examined a comparable approach. The adjudicator has also begun discussions with the egg industry, where statutory enforcement responsibilities would depend on future rules and a formal designation.
The documented dairy outcomes are specific: one processor clarified surplus-milk rights, another added required contract provisions, and a third reviewed proposals on pricing, assurance and self-processing. The businesses and complainants remain unnamed. Further developments will arise through application of the dairy and pig regulations and any separately enacted rules for additional agricultural sectors.
