A. Overview. The cost of milk to a dealer consists of a dealer's raw product costs as calculated according to subsection 8 or C, plus the dealer's expenses directly and indirectly incurred in receiving, processing, packaging and delivering the regulated product as calculated according to subsection D, E, or F. Examples of dealer expenses directly and indirectly incurred in receiving, processing, packaging and delivering milk are set forth in Section I(B). This section contains three sets of procedures for determining raw product costs. The first of these applies to Maine dealers who buy milk in bulk from Maine producers and themselves process the milk they sell. The second of these is similar to the first except that it applies to sales which are not subject to regulation by the State of Maine. The third procedure, which might more appropriately be called packaged product costs, applies to the purchase of milk by subdealers from dealers. See the definitions of "subdealer" and "dealer" contained in Sections I(N) and (D), respectively.
The expenses directly and indirectly incurred by a dealer in receiving, processing, packaging and delivering the regulated product may be determined by the Commission on the basis of the dealer's actual expenses as calculated under D OR E, or, unless the dealer proves lower actual costs, on the basis of its imputed expenses as calculated under F.
B. Raw Product Costs for all Dealers Other Than Subdealers.1. Raw product costs for milk purchased by Maine dairies from Maine producers shall be determined as set forth in subparagraphs (a) - (c), except that where the dealer's purchase price for raw milk is not required by State or Federal law to be based upon a Class I price established by a governmental agency, the dealer's raw product costs shall be deemed to be the purchase price as adjusted by the prevailing butterfat differential, plus any hauling charges paid by the dealer. (a) Determine the Class I price per hundredweight of raw milk of 3.5% butterfat content as established monthly by the Commission:(b) Reduce the Class I price per hundredweight by the butterfat differential established by the Federal Market Administrator for Federal Milk Order No. I (New England Milk Marketing Area) so as to reflect the dollar value on a hundredweight basis of the butterfat found in various formulations of fluid milk. Whole milk shall be deemed to have a butterfat content of 3.25% butterfat unless shown otherwise by the dealer. Nonfat (fat-free) milk shall be deemed to have a butterfat content of .1% butterfat unless shown otherwise by the dealer. Lowfat milk, and skim milk other than nonfat (fat-free) milk shall be deemed to have the butterfat content designated on the cap or container, or as otherwise determined by the Commission.(c) Divide the Class I price of the milk as reduced to reflect the dollar value of its packaged butterfat content on a hundredweight basis by the appropriate generally accepted conversion factor so as to determine the raw product dollar value of packaged milk of varying butterfat content as sold in gallons, three-quart, half-gallon, quart and bulk containers.2. Raw product costs for milk not purchased by Maine dealers from Maine producers (i.e., transactions not subject to the Class I price established monthly by the Commission) shall be based upon the actual price paid by the dealer for Class I milk of 3.5% butterfat content as reduced by the established or prevailing butterfat differential, so that the butterfat value of fluid milk of varying formulations sold in various container sizes may be calculated in the same manner as set forth in paragraph 1, except that any hauling charges paid by the dealer shall also be included in the calculation of raw product costs. Where the dealer's purchase price for raw milk is not required by state or federal law to be based upon a Class I price established by a governmental agency, the dealer's raw product costs shall be deemed to be the purchase price as adjusted by the prevailing butterfat differential, plus any hauling charges paid by the dealer.C. Raw Product Costs for Subdealers. The raw product cost for subdealers shall be the purchase price paid by the subdealer to the dealer for the regulated product.
D. Actual Expenses of Receiving, Processing, Packaging and Delivering Milk Incurred by Dealers Subject to Commission Rule 5A. The Commission may determine the dealer's expenses directly and indirectly incurred in receiving, processing, packaging and delivering milk on the basis of the McClain System reports and information filed by the dealer with the Commission. In addition to submitting McClain System Cost Accounting information, a dealer may also submit a determination of its expenses by a cost accounting system other than the McClain System and request that the Commission use such other system to determine its expenses. A dealer submitting a determination of expenses by a cost accounting system other than McClain must demonstrate, and the Commission must find, that the cost accounting system is regularly used by the dealer in the conduct of its business, that it is based on generally accepted cost accounting principles and that it is at least equivalent to the McClain System in comprehensiveness and reliability as to the expenses incurred in the receiving, processing, packaging and delivering of milk. Where these findings are made, the Commission in its discretion may rely on either the McClain System or the system submitted by the dealer as providing the appropriate demonstration of the dealer's actual expenses. Where these findings are not made, the Commission will rely on the McClain System.
If a dealer contends that its cost of delivering milk to the store in question is lower than its average delivery costs as derived from the McClain System, the Commission may recognize In lieu of such average delivery costs the dealer's cost of delivering milk on the route on which the store is located or the dealer's average cost of delivering milk to the specific store. The Commission shall determine the cost of delivering milk on the route on which the store is located on the basis of the route delivery information filed by the dealer with the Commission pursuant to Commission Rule 11, and the appropriate cost inputs (e.g., driver wages, vehicle expenses) contained in the dealer's records. The Commission shall determine store specific delivery costs on the basis of the route delivery information filed by the dealer with the Commission pursuant to Commission Rule 11 and from other cost information contained in the dealer's records. Store specific costs are to be computed as the sun of the per case average of common route costs, i.e., those costs which cannot be unambiguously attributable to any one stop, and the per case average cost directly attributable to the specific store.
E. Actual Expenses of Receiving, Processing, Packaging and Delivering Milk Incurred by Dealers Not Subject to Commission Rule 5A. The Commission may determine the dealer's (or subdealer's) expenses directly or indirectly Incurred in receiving, processing, packaging and delivering milk on the basis of the McClain System. At the request of the Commission the dealer or subdealer shall prepare and file, within the time set by the Commission, the information and reports required by Rules 5A and 11 covering such periods of time as the Commission may designate. Alternatively, a dealer or subdealer may submit a determination of its expenses by a cost accounting system other than the McClain system and request that the Commission use such other system to determine the dealer's or subdealer's expenses. A dealer or subdealer submitting a determination of expenses by a cost accounting system other than McClain must demonstrate, and the Commission must find, that the cost accounting system is regularly used by the dealer or subdealer in the conduct of its business, that it is based on generally accepted cost accounting principles and that it is at least equivalent to the McClain system in comprehensiveness and reliability as to expenses incurred in the receiving, processing, packaging and delivering of milk. Where these findings are not made, the dealer or subdealer shall prepare and file, within the time set by the Commission, information and reports required by rules 5A and 11 covering such periods of time as the Commission may designate. Where these findings are made, the Commission will rely on the system submitted by the dealer or subdealer as providing the appropriate demonstration of the dealer's or subdealer's actual expenses.
The Commission may recognize route delivery costs or store specific delivery costs in lieu of average delivery costs in the same circumstances and manner as set forth in subsection D.
F. Imputed Expenses of Receiving, Processing, Packaging and Delivering Milk (All Dealers and Subdealers). 1. In the case of dealers other than subdealers, the Commission may determine the imputed expenses of receiving, processing, packaging and delivering milk by multiplying the dealer's price to the retailer for the regulated product by that percentage shown on Table I which most closely corresponds to the raw product cost per hundredweight, as adjusted for butterfat content under Section V(B) (1) (b), that was paid by the dealer with respect to the regulated product.2. In the case of subdealers, the Commission shall determine the imputed expenses of delivering the regulated product by multiplying the subdealer's price to the retailer for the regulated product by that percentage shown on Table II which corresponds most closely to the purchase price paid by the subdealer to the dealer for the regulated product.3. Upon request of the Commission, a dealer or subdealer shall furnish to the Commission, within the time set by the Commission, all information necessary for it to determine the raw product cost paid for the regulated product. in the absence of a timely response the Commission shall calculate imputed expenses for purposes of this subsection on the basis of the Maine Class I price, subject to adjustment for butterfat content, which was in effect at the time of the transaction under examination.4. Any proof of actual expenses lower than the imputed expenses of receiving, processing, packaging and delivering milk as calculated by the Commission under this subsection shall be made by the dealer. (a) in the case of a dealer subject to Rule 5A, in the manner provided in D. for the determination by the Commission of actual expenses of such dealers:(b) in the case of a dealer not subject to Rule 5A, in the manner provided in E. for the determination by the Commission of actual expenses of such dealers.01- 015 C.M.R. ch. 20, § V