a2 Milk cancels Synlait's exclusive manufacturing rights

The a2 Milk Company has cancelled Synlait Milk's exclusive manufacturing and supply rights for stages 1 to 3 of a2MC's infant milk formula products in China, Australia, and New Zealand.

This decision was made due to Synlait's failure to meet the required delivery performance.

However, the manufacturing and supply agreement between the two companies will still remain in place, and Synlait will continue to be an important supplier for a2MC.

The cancellation of exclusivity allows a2MC the option to produce their products at other facilities, such as Mataura Valley Milk.

The dispute between the two companies will be resolved through negotiations and arbitration if necessary.

The impact of this cancellation on MVM's utilization and profitability is not expected to be significant in the next two fiscal years.