1. (a) Discounts or rebates on non-dairy items. For any products other than regulated dairy products that are sold at a discount greater than that afforded to other customers, or when such products are given free of charge to a customer as a direct or indirect part of the sale of dairy product(s), the value of the discount or of the free product must be captured and included in the cost calculations.
2. (b) Gifts, Prizes, Sales Awards. The value of any gift, prize, sales award, vacation, trip, gift certificate, cash, or any other item of property given to any customer as a direct or indirect consequence of a sale of a dairy product must be included in the cost calculations.

3. (c) Advertising and Promotions. For any advertising campaign, promotion, giveaway, coupon, or other incentives, the costs related to that campaign must be recognized as a cost following the provisions of Article 3 of this subchapter.

   Costs that directly or indirectly result from activities within a specific region or activity shall be allocated to the dairy product sold or distributed in that region or throughout that activity.

In determining whether any wholesale customer sold milk, cream, or any other dairy product below cost, the Department shall evaluate the total consideration paid or exchanged for the processed dairy product as reflected on such wholesale customer's invoice, or the expense of replacement, whichever is lower, plus that wholesale customer's Cost of Doing Business. For the purposes of this subchapter, “Cost of Doing Business” shall include all costs and expenses related to the wholesale customer's total operation including, but not limited to the following:

Note: Authority cited: Sections 407 and 61341, Food and Agricultural Code. Reference: Sections 61382, 61383, 61384, 61441, 61442 and 61443, Food and Agricultural Code.

History

1. New section filed 8-8-2005; operative 9-7-2005 (Register 2005, No. 32).