Fresh produce contract regulations – draft proposals

Feedback on version 2 of the draft proposals has now ended.

The UK Government is continuing its drive to improve fairness in the supply chain by using its ‘Fair Dealing’ powers to address power imbalances between producers and buyers. 

While the NFU called for a Buyers' Code of Practice to address poor buying behaviour, in March 2025, Defra shared its first draft proposals to introduce Minimum Contract Regulations followed by engagement with the sector including meeting producers, packers, retailers, and academics.

Officials also visited growers and held meetings with key organisations, including the NFU, retailers, and devolved administrations.

Why is Defra looking at introducing minimum contract terms?

Attention turned to fresh produce contractual agreements when growers raised concerns following a series of events that left shelves empty and growers unable to secure cost price increases.

Defra has already introduced legally-binding minimum contract rules in the milk and pig sectors and policymakers are exploring similar measures for the fresh produce sector.  

It aims to strike a fair balance across supply chain stakeholders without disrupting good practice, the flow of goods, or causing unintended consequences.

Have your say: Defra is now inviting further feedback on its fresh produce proposals version 2.0 by 26 September 2025.

Individual responses can also be submitted to Defra directly via email to: [email protected]. 

Individual meetings to discuss feedback are also available on request to the Defra team using the above email address.

NFU wants to hear your views

The NFU wants to hear from its members by 26 September to inform our feedback to Defra. Email [email protected] with your thoughts.

Further drafts will be shared as needed, with a final version to be published before any legal or parliamentary steps are taken to bring the regulations into law.

This is a key opportunity for the fresh produce sector to shape future regulation, ensuring fairer, more resilient supply chains for all.

What are the major changes between version 1 and version 2? 

Amendments to existing sections: 

Extent and express terms: Wording has been amended to provide greater clarity. The proposed regulations will also apply to all UK business purchasers who directly purchase from farming cooperatives (where their members are only producers). The definition of “fresh produce” for the purpose of these proposed regulations has also been included.

Requirement to use a written purchase agreement and general provisions: The format for a purchase agreement includes detailing that it is signed.

Supply period and purchase agreement terms: Amendments made to allow for flexibility in a quantifiable way on the first and last day of supply has been included. Both parties must have a reasonable communication mechanism in place, allowing them to freely agree the start and end dates of supply, to accommodate for factors such as weather.

Supply volumes: For price purchase agreements with multiple fixed prices that cover different time periods, a provision to specify volumes for each time period with a different price has been included.  

Pricing and pricing mechanism: Fixed and variable pricing are defined. A provision for fixed pricing to be agreed within reasonable notice of the start date of a supply period, according to the crops production cycle has been included. A new subsection for promotional pricing and review of pricing partway through a purchase agreement has been added.

Specification: A new subsection for packaging includes provisions for packaging specifications and how any changes should be handled.

Rejections, deductions and bonuses: The title of this sub-section has changed and more emphasis has been made on how rejections should be dealt with by both parties. A provision to set out when ownership of the crop is handed over from the producer to the business purchaser, and therefore a timeframe for rejecting produce, has been included. A provision for how rejections should be handled with the right for the producer to inspect within 24 hours has been added. Further wording to provide clarity on deductions is included.

Termination and dispute resolution: A provision for a reasonable notice period should one party wish to terminate or raise a dispute has been added.

Variation to the purchase agreement terms: A provision for a reasonable time period for responses by either party has been included for all variations to purchase agreements. 

New sections:

Notice to disapply: A new provision for sellers to opt-out of the regulations where written notice is to be given to business purchasers. This is only permitted for produce that can be delivered within a 30-day timeframe or of value less than £1,000. This is intended to cover spot purchases and related transactions, and not to disapply the regulations for long-term agreements

Timings for making agreements: A new provision has been included that stipulates when purchase agreements must be made. Purchase agreements that follow the tender process must be agreed within 12 months of the first date of supply. All other purchase agreements must be agreed within a reasonable timeframe before the first date of supply, according to crop production cycles. The definition for “reasonable notice” for the purpose of the proposed regulations that aligns with GSCOP has been included. 

Removed sections: 

Cooling off period: Removed based on stakeholder feedback.

The NFU's survey has now closed for responses.

Following Defra’s consultation in early 2024, which asked growers if they’d like to see contract regulations, Defra has now drafted proposals and is asking for feedback from growers.

The NFU conducted an online survey to seek feedback from growers.

The proposals include:

• Impose obligations on any business purchasing fresh produce from a seller (including growers/packers/a PO who purchase from other growers).
• Stipulate minimum contract terms that must be included within mandatory written contracts.
• Provisions which stipulate the length of the contract.
• Provisions that obligate contracts to include volume requirements. Proposals allow for both parties to agree an approach to manage periods of over or under supply.
• Stipulations on price and pricing mechanism, including transparency on how prices are determined, method and frequency of payment.
• Obligations for contracts to include specification requirements and pre-agreed tolerances, transparency regarding charges and deductions.
• A force majeure clause.
• A cooling off period.
• A termination clause.
• Obligations around variations to the agreement.
• Requirements for a clear dispute resolution process to be set out within the contract.
• Enforcement of the regulation.

The NFU has submitted its response to Defra’s fairness in the fresh produce supply chain consultation and has advocated for the introduction of a horticulture buyers’ code of practice, which will address behavioural practices to the benefit of the whole supply chain.

The response highlighted six key barriers which currently prevent growers from being competitive and innovative within the industry. These are:

• A lack of long term supply commitments.
• A lack of risk/cost sharing between buyers and growers.
• Limited access to mid-season re-negotiations, which may be required for commercial reasons.
• Unreasonable delay tactics by buyers.
• Unreasonable and unexpected demands to growers throughout the contract term.
• Ambiguity in relation to rejections.

The NFU has recommended that a code of practice should address these six barriers to industry growth, which is enforced by an independent body or person.

A number of recommendations were also made in relation to the GSCOP (Groceries Supply Code of Practice), such as that the GSCOP and GCA roles should be expanded to include large processors and manufacturers in its scope, and to include ornamental crops in its remit.

The NFU has also recommended that the GCA’s seven golden rules are legally incorporated into the GSCOP, and that government works to ensure the current GSCOP legislation is reviewed to ensure its relevancy to the current market.

“Evidence gathered from our grower members shows just how strained relationships in the horticulture supply chain have become,” said NFU Horticulture and Potatoes Board chair Martin Emmett.

He added: “While growers want to remain anonymous for fear of losing contracts, we have heard examples of unreasonable delay tactics to negotiating contracts, making it difficult to plan for the season ahead and unexpected requests mid-contract.

“We want to see our domestic supply chain geared to consistently deliver a sustainable supply of affordable British food for people.

“It is essential for the future of the sector that we address concerns about fairness in the supply chain and build confidence back into the sector.”

NFU members can log in and download the full response submitted to Defra at: Fairness in the fresh produce
supply chain consultation – NFU response

This consultation is now closed for responses.

The Government says the review exercise will ‘support British farmers and growers to receive a fair price for their products’ and help to ‘ensure customers have access to high-quality fresh British products’.

The consultation remained open for ten weeks until 22 February 2024. The NFU consulted with members between 16 January – 18 February on their views to feed into its response to Defra's consultation. Grower members were also encouraged to respond to the consultation directly. 

Commenting on the review, NFU Horticulture Board chair Martin Emmett said: “I urge all growers to have their say in this government consultation to give us the best chance of enacting much-needed change, including those growers of plants and flowers that supply the major grocery retailers.”

More information on the consultation can be found at: GOV.UK | Contractual relationships in the UK fresh produce industry.

Have your say on fairness in the fresh produce supply chain

30 January 202430 January 2024