Milk Quality Standards Generally. GVC requires its suppliers to comply with a series of raw milk supply standards based on domestic and international industry regulations in order to ensure that the milk it processes and sells is of the highest quality. The Minimum Price paid by GVC to Suppliers is quoted on the basis that the Milk supplied is Grade 1 Quality Milk. In order to be ‘Grade 1’, milk supplied to GVC must meet each of the specifications referred to below. If the milk supplied does not meet the Grade 1 Quality Specifications, the amount paid by GVC for any affected milk will be reduced in accordance with the formula set out in Table 3.1. In addition, and depending on the particular circumstances, if the milk supplied to GVC does not meet the Grade 1 Quality Specifications, other penalties may apply. To minimize losses resulting from inferior quality Milk leaving the Farm and being mixed with other Milk, GVC encourages early notification of any Milk quality issues. For this reason, it offers Suppliers up to two paid “Prior Notification” instances over the course of any one financial year. Suppliers are encouraged to notify GVC if they know or suspect that Milk is/may be unsuitable for pick up BEFORE the milk tanker arrives at the Farm. Prior Notifications made in accordance with this clause will be paid at the Minimum Price and otherwise in accordance with this Milk Supply Agreement. In the event that Milk being collected does not pass the sensory test undertaken by the milk tanker driver before pumping on, and the Milk is therefore deemed unsuitable, the driver will not collect the Milk. This does not fall into the category of ‘’Prior Notification” and GVC will not pay for the Milk in this circumstance. Milk is graded as follows: GRADE CONSEQUENCE 1 Meets GVC’s Grade 1 Quality Specifications - Minimum Price is payable 2 Deduction of 10% from the Minimum Price otherwise payable 3 Deduction of 20% from the Minimum Price otherwise payable Monetary penalties imposed by GVC if Milk does not meet Grade 1 Quality Specifications. Table 3.1
