US almond growers’ group Blue Diamond Growers has accused Freedom Foods of breaching its licence agreement and fraud. It is seeking US$16 million. Freedom Foods has launched its own action against the group alleging misleading and deceptive conduct and not acting in good faith.
The companies entered a licence agreement in 2011 in which Freedom would exclusively manufacture Blue Diamond almond beverages in Australia and New Zealand. It was amended in 2014, giving Freedom Foods permission to manufacture private label brands but using the Blue Diamond almond base. Blue Diamond would provide rebates, which are now at the centre of the court action.
Blue Diamond alleged Freedom’s manufacture of other brands including MilkLab and Australia’s Own – which are not organic or private label – was in breach of their agreement.
The court documents state: “By the time Blue Diamond became aware of Freedom’s fraud and breaches of the licence contracts, Freedom had already established its MilkLab brand and products in the marketplace, the market share for Blue Diamond’s products had significantly decreased and Blue Diamond’s brand and consumer reputation had deteriorated.”
Freedom Foods said Blue Diamond wants to restrain it from manufacturing or selling nut-based beverage products in Australia or New Zealand that are not Blue Diamond products, organic or private label, including MilkLab and Australia’s Own brand nut-based beverage products; and from purchasing non-organic almond base from sources other than Blue Diamond for manufacturing.
Meanwhile, Freedom Foods has filed proceedings in the Federal Court against Blue Diamond Growers. It is seeking declaratory orders in relation to the licence agreement saying it had not breached the licence agreement, that it wasn’t required to obtain almond base ingredients exclusively from Blue Diamond and that the licencing agreement is a franchising agreement under the Franchising Code of Conduct.
Freedom Foods said Blue Diamond had breached its obligations under the code to act in good faith and has engaged in unconscionable conduct and misleading and deceptive conduct contrary to the Australian Consumer Law.
Freedom Foods has also announced its new chief financial officer. Josée Lemoine will join the company from 16 November.
Lemoine’s most recent role was as CFO for InvoCare. She has worked in multiple industries including FMCG, manufacturing, media, mining and telecommunications. She has held senior finance roles at Telstra, Rio Tinto, Fairfax, Boral and Arnott’s.
Freedom Foods said: “She brings extensive experience driving business performance and organisation transformation initiatives and her first priority on joining the company will be to focus on improving reporting, financial controls and stakeholder management.
Lemoine said she was pleased to be joining the company during this “transormational”period.
The Australian Financial Review has reported the Perich family will be putting in $100 million as part of the company’s recapitalisation plan. Four investment banks are pitching for adviser role on a possible $200m debt or equity raise, it said.