‘Walking away’: Milklab maker ‘refuses’ to talk as European dispute sours

Former world champion surfer Joel Parkinson has accused the maker of popular plant-based milk Milklab of walking away from an alleged deal it had with French tea and coffee company, Sunday Collab International, to distribute Milklab across Europe.

Australian surfer Joel Parkinson was part of Sunday Collab’s negotiating team that pitched Milklab’s expansion into Europe.

Noumi shares are sharply lower on Wednesday. Credit: Janie Barrett/SMH

“That this matter has ended up in court is extremely disappointing,” Parkinson said in a statement.

“Sunday Collab International has gone to court to recover the losses we have suffered as a result of Noumi’s conduct in walking away from the agreement and then refusing to communicate with us.”

2012 world surfing champion Joel Parkinson was part of Sunday Collab’s negotiating team that pitched Milklab’s expansion to Europe.Credit: Paul Harris

Sunday Collab said in a statement to The Sydney Morning Herald and The Age that its dispute with Noumi began in mid-2020 after it tried to enforce the Europe distribution agreement the pair had allegedly inked.

The French company is seeking €17 million ($24.7 million) in compensation for costs incurred in launching the partnership throughout Europe in 2019, the company said, which it says Noumi participated in by delivering its Milklab range as well as marketing and packaging materials for product launches in Milan, Italy in October 2019 and the London Coffee Festival in early 2020.

“Unfortunately, following a management and board spill in August 2020, Noumi has repeatedly denied there is an agreement or any partnership in place, nor any obligation owed by Noumi,” Sunday Collab said in its statement.

Noumi also “refused to communicate” with Sunday Collab, the company alleges.

“Given this stance, coupled with the time and money we had already invested, there was little option but to bring the matter before the courts, which we did in March 2021.”

Noumi has said Sunday Collab’s claims are “without merit” and claims for lost profit are “wholly unsupportable”, and will defend the action.

“Noumi also considers the quantum of Sunday Collab’s alleged losses are misconceived and will not succeed, particularly given: Sunday Collab provided little or no demonstrable relevant previous distribution experience in connection with dairy or plant-based beverages; the highly competitive nature of the market in Europe; and the significant disruption caused by COVID-19 and broader economic challenges which affected, and continue to affect supply chains and distribution networks.”

Noumi secures funds to pay off Blue Diamond settlement

The Sunday Collab lawsuit is the latest among a string of legal battles Noumi is embroiled in, including two class actions (that have been merged into one proceeding), a countersuit from former auditor Deloitte, and a settlement with US almond grower Blue Diamond that it is now one step closer to resolving.

At an extraordinary general meeting on Wednesday morning, the overwhelming majority of Noumi’s shareholders approved the company’s proposed sale of its 9.4 per cent stake in Australian Fresh Milk Holdings (AFMH) for $1.45 per share, or $29.6 million to pay off the remaining sum owed to US almond grower Blue Diamond.

“Approximately $25 million of the proceeds from the sale will be allocated towards Noumi’s obligations under the settlement agreement ... with the balance of $4.65 million to be used for general purposes including expenses related to the transaction,” said Noumi chair Genevieve Gregor.

Noumi’s shares sunk by more than 5 per cent to close the session at 26 cents.

The dispute with Blue Diamond began in January 2020 over unpaid invoices. It escalated in September that year when Blue Diamond sued for fraud and breaching their licensing agreement by manufacturing nut-based beverages including Milklab and another brand, Australia’s Own.

Noumi (then known as Freedom Foods) responded by filing its own proceedings against Blue Diamond, arguing it hadn’t breached their licensing agreement, that Blue Diamond engaged in misleading and deceptive conduct, and was not acting in good faith.

The matter was eventually settled in January 2022 through US arbitration, after the Full Federal Court blocked Noumi’s attempt to have the matter thrown out of court.

Starting from September 1, 2022, Noumi will pay the $US18 million ($25.7 million) owed in quarterly instalments of $US1.125 million across four years.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.