From a pure point of view, a co-packer contract is a big investment. The agreement allows the distributor to reliably access a production site. There is also a huge added value for a co-packaging agreement – the exercise of discussion and the development of a co-packing agreement with a lawyer is a detailed diagnostic tool to determine the overall health of a food company. Here are some areas that should be addressed in an agreement on packaging services (in alphabetical order): an agreement on consolidation of services should define the conditions, obligations and requirements for both parties, as well as co-packaging services and performance levels. However, an agreement should not be too detailed or rigid, especially for a fast-growing company, otherwise the agreement risks precisely exacerbating the problems it is supposed to avoid. There are different ways, such as co-packers to pay for services; it can be a fixed price per unit (by volume), a flat fee per hour (hours, weekly, monthly) or a combination of fixed and variable taxes. The agreement should reflect the price structure that best suits the type of services provided and packaged products. It is always good to have in the agreement a clause specifying when rates can be adjusted (for example. B once a year) and this can trigger a price increase (for example. B, raising the minimum wage, inflation or increasing the cost of raw materials). The agreement must have certain elements common to all contracts and certain parts specific to the contract packaging industry.

A contractual packaging contract must have: the agreement must indicate who orders ingredients, labels, packaging materials and shipping cartons. The paragraph should indicate the method to be used for the batch or batch code and the required date format. A property provision is a very important clause in the agreement and defines that intellectual property belongs to the client in relation to everything the co-packer produces for the customer. The agreement must state that the Co-Packer must not use or register the customer`s intellectual property rights or trademarks. In addition, it is important to determine whether a co-packer can use the customer`s name or logo on their website or marketing materials. Co-packing is an excellent shortcut for on-demand food production capacity, but it should not be seen as a complete abandonment of all production responsibilities. A grocery store still needs a solid foundation to succeed in a co-pack relationship. Planning a co-packer and developing a co-packer agreement is a major diagnostic test for these bases.

In addition, the agreement should determine whether the customer can enter the co-packer`s premises to verify the methods and conditions of the co-packing as well as the quality of the packaged products. The agreement may also provide for the client or an external audit firm to conduct an annual audit of the co-packer. The agreement must state that the ownership of the products as well as all materials and documents provided by the customer in connection with the reconditioning of the products are always available to the customer. Distributors can address these risks through a comprehensive manufacturing agreement. Distributors may consider including the following points in copacker agreements: The jurisdiction defines where a dispute is resolved.