A2 Milk and Synlait have submitted to arbitration their dispute over the cancellation of Synlait’s exclusive manufacturing rights after talks failed.
A2 Milk announced last month it was cancelling the exclusive manufacturing and supply rights held by Synlait for stages one to three of A2 Milk’s infant milk formula products in the China, Australia and New Zealand markets.
The dairy company claimed Synlait’s delivery in full and on-time performance fell below the required agreed level.
Synlait later disputed that A2 Milk has the right to cancel the exclusivity arrangements.
The two companies entered into a 20-business day period of good faith negotiations but could not reach a resolution.
Synlait emphasised that its exclusivity remained until the dispute was settled.
The firm added it had a base supply agreement with A2 Milk that could only be terminated with three years’ notice, and its Dunsandel plant was officially licensed by Chinese authorities to manufacture A2 Milk products.
