The a2 Milk Company and Synlait are heading to arbitration as dispute resolutions sour over cancelled exclusivity deal.
In September, a2 Milk cancelled the exclusive manufacturing and supply rights for stages 1 to 3 of a2’s infant milk formula products, which were sold in Australia, China and New Zealand.
Synlait disputed a2’s right to cancel the agreement, stating that it continues to hold the Chinese regulatory State Administration for Market Regulation licences for sale of the product in the Chinese market, which is attached to Synlait’s Dunsandel manufacturing Facilities, and expects to continue manufacturing these products for the Chinese market until the licence expires in 2027.
The two companies had entered into a 20-busines day period of good faith negotiations, however, these talks have now hit a stalemate.
The matter will now go through a confidential binding arbitration.