A legal battle over spilt milk is brewing between Australian-owned Freedom Foods Group and US-based Blue Diamond Growers, with each initiating legal proceedings against the other.
The dispute could cost Freedom Foods up to US$16 million.
On September 25, Blue Diamond Growers initiated two proceedings against Freedom Foods in the US, alleging the business committed fraud and breach its contract with BDG when it used different suppliers when creating its milk products.
BDG claims Freedom Foods used other suppliers for nut-based and non-organic almond based products for manufacture and sale in Australia and New Zealand, when its agreement should have precluded that. Freedom Foods claims this is not true.
Five days later, on September 30, Freedom Foods initiated its own litigation against BDG in the Federal Court of Australia, claiming that it hasn’t breached any agreements and that BDG failed to act in good faith, and engaged in unconscionable conduct and misleading conduct – something BDG intends to defend itself against.
“Freedom Foods vehemently rejects the claims put by Blue Diamond and has launched Federal Court action, among other orders, declaratory orders that Freedom Foods has not breached with license agreement with Blue Diamond,” a Freedom Foods spokesperson said.
Part of the claims being levied against Freedom Foods rely on alleged oral agreements, which are not covered under the arbitration provisions of their agreement.