The on-going dispute between Freedom Foods Group and Blue Diamond Growers has intensified with the Australian manufacturer starting legal proceedings against the US almond supplier.

Freedom Foods, which acts as a manufacturer and distributor for Blue Diamond in Australia, said in a statement to the Australian Securities Exchange (ASX) yesterday (30 September) it had instituted proceedings in the Federal Court of Australia against the US firm.

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The dispute between the companies first became public at the start of the year when it was reported California-based Blue Diamond was suing Freedom Foods for allegedly breaching agreements between the two.

Freedom Foods, in its newly-issued legal challenge, is seeking a declaration it has not breached a licence agreement between the two parties by manufacturing, packaging, selling and distributing Milklab almond milk products or private-label almond milk products, and, that it is not obliged to obtain almond milk base ingredients exclusively from Blue Diamond for their production.

Blue Diamond has already instituted proceedings with the American Arbitration Association against Freedom Foods. It is seeking compensatory and general damages for what it alleges is a breach of the licence agreement, which it asserts to be worth at least US$16m.

The Australian food group claims the licensing agreement is a franchising arrangement and Blue Diamond has breached its obligations “to act in good faith and has engaged in unconscionable conduct and misleading and deceptive conduct contrary to the Australian Consumer Law”.

Blue Diamond is additionally seeking orders restraining Freedom Foods from manufacturing or selling nut-based beverage products in Australia or New Zealand that are not Blue Diamond products. Blue Diamond also wants Freedom Foods to be stopped from buying non-organic almond base from sources other than the US co-op for the manufacture of non-organic, non-private label nut-based beverage products for sale in the two countries.

Blue Diamond has also started judicial proceedings against Freedom Foods in the US District Court, Eastern District California, for breach of an alleged oral agreement.

In yesterday’s statement to the ASX, Freedom Foods said it refutes the Blue Diamond claims.

The Australian company said it has “sought to engage in good faith discussions with Blue Diamond regarding various matters in relation to the licence agreement, but Blue Diamond has refused to engage in any discussions with FNP [Freedom Foods]”.

Freedom Foods said it intends to vigorously pursue its claim and to defend the Blue Diamond claim and related court proceedings. 

A spokesperson for Blue Diamond confirmed to just-food that the “actions have been filed [in the US] and that Freedom Foods’ actions were filed in response to our filings”.

The spokesperson said Blue Diamond would not comment on pending litigation.