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Freedom Foods (ASX:FNP) takes Almond Breeze manufacturer to court
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  • Freedom Foods (FNP) has commenced legal proceedings against Almond Breeze manufacture Blue Diamond Growers over a disputed licencing agreement
  • Blue Diamond alleges that the ongoing licensing agreement between the two companies was violated when Freedom Foods began producing and selling its own competing almond milk brand MILKLAB
  • Freedom Foods refutes these claims and alleges that Blue Diamond has failed to act in good faith and has engaged in unconscionable, misleading and deceptive conduct contrary to current Australian consumer laws
  • Meanwhile, Blue Diamond is seeking at least US$16 million (approximately A$22.32 million) in damages in its own legal action, commenced through the American Arbitration Association
  • Shares in Freedom Foods remain suspended and last traded at $3.01 per share

On the heels of a challenging few months, Freedom Foods (FNP) has now been flung into a legal battle with one of its key manufacturers.

The prominent health foods supplier informed the market after trading closed yesterday that it was taking almond producer Blue Diamond Growers to the Federal Court of Australia over a disputed licensing agreement.

First signed in 2011, the licensing agreement manages Freedom Food's sale and distribution of Blue Diamond’s well-known milk alternative Almond Breeze.

The agreement fell into dispute, however, when Freedom Foods began producing and selling its competing almond milk brand MILKLAB.

Blue Diamond considers this action a breach of the original agreement and, alongside Freedom Food’s own legal action, is now seeking at least US$16 million (approximately A$22.32 million) in damages through the American Arbitration Association.

Blue Diamond is also attempting to restrain Freedom Foods from distributing any competing products or sourcing non-organic almonds from a third-party.

Meanwhile, Freedom Foods refutes the claims and maintains it is allowed to continue manufacturing MILKLAB products and sourcing its almonds from third parties without breaching its current arrangement with Blue Diamond. Freedom Foods also claims that Blue Diamond has engaged in unconscionable, misleading and deceptive conduct contrary to the current Australian consumer laws.

This isn’t the first time a dispute between the two companies has led to court. In January this year, Blue Diamond alleged Freedom Foods failed to pay withheld supply payments to fund its dividend, damaging relations between the two groups.

This latest legal turmoil comes after Freedom Foods was hit by a shock CEO resignation in June this year, amid its ongoing recapitalisation plan.

Then-CEO Rory Macleod quit after the company revealed a $60 million write-down, due to expired products. The surprise loss sent shares down dramatically, before they were suspended pending an investigation into its financial woes.

Shares in Freedom Foods remain suspended and last traded for $3.01 per share.

FNP by the numbers
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