Bellamys got over the problem of meeting demand by signing new agreements with suppliers Fonterra and Bega Cheese. These agreements, however, included minimum volume commitments. When Bellamys' growth stalled, they had to keep paying their suppliers for the minimum volume irrespective of sales. In an attempt to increase sales, Bellamys discounted their prices but this undercut the Daigous and was percieved by many Chinese consumers as a reason to question their quality.
Ann: Bubs Australia Investor Update - Citi, page-24
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