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5. For regulation 4 (Scottish Islands area) substitute–
4.—(1) Subject to paragraph (3), quota registered to direct sales quota holders and wholesale quota holders within a Scottish Islands area may only be used by producers and purchasers against direct sales or wholesale deliveries of milk produced within that Scottish Islands area.
(2) Where a direct sales quota holder or wholesale quota holder has a part of the dairy enterprise of that quota holder outside a Scottish Islands area, that quota holder shall be treated for the purposes of this regulation as a direct sales quota holder or wholesale quota holder within a Scottish Islands area if 50 per cent or more of the dairy enterprise of that quota holder is within that area.
(3) Paragraph (1) shall not apply to the reallocation of quota undertaken in accordance with Schedule 3.”.
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