Friday, 16 August 2024 12:55

Synlait, a2 Milk settle long-running dispute

Written by  Sudesh Kissun
Synlait has agreed that the exclusivity it has under the Nutritional Powders Manufacturing and Supply Agreement (NPMSA) for a2 Platinum and other nutritional products will cease to apply from 1 January 2025. Synlait has agreed that the exclusivity it has under the Nutritional Powders Manufacturing and Supply Agreement (NPMSA) for a2 Platinum and other nutritional products will cease to apply from 1 January 2025.

Canterbury milk processor Synlait has settled a long-running dispute over exclusive manufacturing rights and pricing with a cornerstone shareholder, a2 Milk Company.

The two parties have been involved in arbitration for nearly a year.

Under a deal announced to the NZ Stock Exchange, Synlait has agreed that the exclusivity it has under the Nutritional Powders Manufacturing and Supply Agreement (NPMSA) for a2 Platinum and other nutritional products will cease to apply from 1 January 2025.

However, Synlait expects to continue to produce all products under the NPMSA in the short term.

Synlait will also continue to hold the Chinese regulatory State Administration for Market Regulation (SAMR) registration (currently expiring September 2027), attached to its Dunsandel facility, after settlement takes effect. The registration is for a2MC’s Chinese labelled infant formula (stages one, two and three).

Despite the exclusive supply arrangements ending, Synlait expects that a2MC’s China label products will continue to be produced at Synlait’s Dunsandel facility unless the company can obtain its own SAMR registration to manufacture those products.

As part of the settlement, a2MC will make a one-off payment of $24.75m to Synlait. That payment includes amounts that had largely been withheld in accordance with the terms of the NPMSA from payment pending resolution of matters in dispute.

Synlait chief executive Grant Watson says settling these disputes is another positive step forward in our business recovery plan.

“With the disputes behind us, we are pleased to be able to confirm to our shareholders The a2 Milk Company’s support for our upcoming equity raise. This marks genuine progress for Synlait – we are delivering on the turnaround actions needed to reset our performance and better position the company for the future.”

Synlait’s share price rose 6c to 36c/share after news of the settlement was made public.

More like this

Synlait's back

OPINION: After years of financial turmoil, Canterbury milk processor Synlait is now back in business.

Wyeth to head Synlait

Former Westland Milk boss Richard Wyeth is taking over as chief executive of Canterbury milk processor Synlait from May 19.

Featured

NZEI unhappy with funding cut for teachers

Education union NZEI Te Riu Roa says that while educators will support the Government’s investment in learning support, they’re likely to be disappointed that it has been paid for by defunding expert teachers.

EU regulations unfairly threaten $200m exports

A European Union regulation ensuring that the products its citizens consume do not contribute to deforestation or forest degradation worldwide threatens $200m of New Zealand beef and leather exports.

Bionic Plus back on vet clinic shelves

A long-acting, controlled- release capsule designed to protect ewes from internal parasites during the lambing period is back on the market following a comprehensive reassessment.

National

Top ag scientist to advise PM

A highly experienced agricultural scientist with specialist knowledge of the dairy sector is the Prime Minister's new Chief Science Advisor.

Machinery & Products

Hose runner saves time and effort

Rakaia-based equipment manufacturer Pluck’s Engineering will soon start production of a new machine designed to simplify the deployment and retrieval…

» Latest Print Issues Online

Milking It

Science fiction

OPINION: Last week's announcement of Prime Minister’s new Science and Technology Advisory Council hasn’t gone down too well in the…

Bye bye Paris?

OPINION: At its recent annual general meeting, Federated Farmers’ Auckland province called for New Zealand to withdraw from the Paris…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter