The a2 Milk Company has entered into mediation with Synlait over the cancellation of its exclusive manufacturing and supply rights agreement.
On September 18 a2 Milk announced it would end the arrangement with Synlait covering infant formula base stages 1 to 3.
At the time, a2 Milk said Synlait’s delivery and performance during 2023 has fallen below the level required for the exclusive manufacturing and supply rights.
Synlait disputed the notice and, in accordance with the dispute resolution provisions of the manufacturing and supply agreement, a2 and Synlait entered into a 20-business day period of good faith negotiations.
In an announcement to the stock exchange, a2 Milk said those negotiations have not resolved the dispute.
It said the matter will now be submitted to confidential binding arbitration as provided for under the dispute resolution provisions of the manufacturing and supply agreement.