ASX-listed health food distributor Freedom Foods has been hit with legal action in California after a key supplier alleged the company withheld payments for a well-known almond milk brand to fund dividend payouts to shareholders.
Freedom Financing, a wholly owned subsidiary of the $1.2 billion listed group was last month sued by Sacramento-based Blue Diamond, US court documents lodged in December, and obtained by The Age and The Sydney Morning Herald, show. Blue Diamond, a co-operative of more than 3000 almond farms, produces the Blue Diamond Almond Breeze milk range.
The almond milk products are available at Woolworths, Coles and Foodworks in Australia as well as other outlets. The Almond Breeze brand is also popular in cafes. Freedom Foods, which counts the billionaire western Sydney-based Perrich clan as its majority shareholder and three members of the family as directors, has had a distribution contract with Blue Diamond since 2011. Blue Diamond sells over $US1.5 billion ($2.18 billion) in almonds globally each year.
However, Blue Diamond alleges Freedom’s subsidiary Freedom Financing stopped paying Blue Diamond the full amount of its invoices from July last year. It alleges the shortfall in payments is “at least” $US7.87 million ($11.3 million). It is seeking that amount, plus interest and costs. It has also asked that a receiver be appointed to Freedom Financing to trace the assets of Freedom Financing.