Ann: Notice of Meeting and update to remuneration practices, page-15

Not quite sure I follow you regarding the exclusivity dispute. A2M only wish to transfer the production of A2 Platinum (English label) to MVM in the near term. China label production cannot realistically occur anywhere else for the period of the approval (which I think was to 2027).

So if A2 is unable to use arbitration to successfully peel English label manufacturing away from Synlait, a three year termination notice would take them up to around the end of the current SAMR approval anyway. So, in that scenario they would presumably have two options, 1) to apply for a new SAMR approval through MVM (riskier definitely) and/or 2) to re-apply for approval through Synlait. If it is the latter case, the termination notice would allow them to negotiate a new supply agreement that only pertains to China label.

I can't see any scenario in which Synlait would ultimately want to lose A2's China label business from 2027 onwards. The real issue is that if arbitration somehow goes against A2M, it would delay the transfer of English label production to MVM, since they would instead need to wait 1-2 years longer than they had planned.

The other thing to note is that they have always flagged the intention to obtain multiple SAMR approvals, so they could take both options. They could apply through both MVM and via Synlait prior to 2027, which would de-risk things to an extent and strengthen their negotiating power with Synlait. They have Chinese connections via both facilities (CAHG with MVM, Bright Dairy with Synlait) so it seems reasonable to expect that they could obtain approvals in both cases.

Having said all this you are probably correct about Synlait trying to renegotiate, I am sure they have run through all of these scenarios and can see their negotiating power slipping away down the track, best to strike a bargain now and lock in a longer-term role in A2's supply chain.