Why it matters: The a2 Milk Co is one of the biggest players in infant formula.
A2 is cancelling the bulk of the exclusive supply arrangements for infant formula it had with Synlait.
It gives a2 Milk the option to shift more production to its own factory.
The a2 Milk Company has cancelled the exclusive manufacturing and supply rights for most of the group’s infant formula supplied by New Zealand’s Synlait, worsening the tensions between the two groups as a2 Milk tries to gain more control over its supply chains.
The escalation of the feud further undermined Synlait’s share price on Monday when it emerged from a short trading halt, down 8.4 per cent to $1.08. Synlait shares have slumped from $3.40 in early January. Shares in a2 Milk dropped by 1.1 per cent on Monday.
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Simon Evans writes on business specialising in retail, manufacturing, beverages, mining and M&A. He is based in Adelaide. Connect with Simon on Twitter. Email Simon at simon.evans@afr.com
