(Reuters) – New Zealand’s A2 Milk Company Ltd said on Monday it had given notice to Synlait Milk after market hours on Friday that it was canceling its exclusive manufacturing and supply rights for certain infant milk formula products of company.

A2 Milk issued cancellation notices on Synlait’s exclusive manufacturing and supply rights on stages 1 to 3 of the dairy producer’s infant milk formula as Synlait’s delivery in full and on time performance during fiscal 2023 fell below the required level.

Synlait did not immediately respond to a Reuters request for comment but A2 Milk said the manufacturing and supply agreement between the parties would remain in place as Synlait considers the cancellation notice.

Removal of Synlait’s exclusivity will give the dairy firm a chance to expand production of its English label product at any facility at a time when one of its largest markets, China, introduces stringent regulations for infant formula.

(Reporting by John Biju in Bengaluru; Editing by Sandra Maler)

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