Synlait Milk has announced that its exclusivity dispute with The A2 Milk Company remains unresolved and is now entering arbitration.
As reported by FoodBev in September, A2 Milk announced that it would be cancelling Synlait’s exclusive manufacturing and supply rights for some of its infant formula products due to Synlait’s delivery performance falling below the required level within the fiscal year 2023.
Synlait responded to the announcement and said it would be disputing the cancellation, with the two dairy businesses entering a period of good faith negotiations shortly afterwards.
Yesterday (17 October), the New Zealand-based milk nutrition company revealed that its dispute with A2 Milk was not resolved successfully and will now enter into a confidential binding arbitration process.
The process will aim to determine the validity of A2 Milk’s notice of cancellation of the exclusivity arrangements under the Nutritional Powders Manufacturing and Supply Agreement (NPMSA) for the A2 Platinum formula and other nutritional products.
Synlait reaffirmed that the cancellation relates only to the exclusivity arrangements, and that the NPMSA remains in place but may be terminated by either party on three years’ notice. The company continues to hold the Chinese regulatory State Administration for Market Regulation (SAMR) licence, which is attached to Synlait’s Dunsandel manufacturing facilities.
The SAMR licence is for A2 Milk’s Chinese labelled infant formula products (stages one, two and three), which Synlait expects to manufacture for A2 until that licence expires in September 2027.
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