Veritas to appeal Burger King decision to quit meat patty supply deal
Veritas Investments [NZX: VIL], the food and beverage investor, plans to appeal an arbitrator's ruling in favour of Burger King franchise operator Antares Restaurant Group quitting their joint venture, which supplies beef patties to the fast food operator.
Auckland-based Veritas bought half of meat patty maker Kiwi Pacific Foods in late 2013, which held a preferred supply deal with Burger King. The other half of Kiwi Pacific Foods is owned by Antares. In April this year, Antares sought to quit the joint venture over a disputed interpretation of the supply deal, which led to arbitration between the companies, Veritas said in a statement. The arbitrator issued a declaration in favour of Antares' intention to terminate the joint venture, which will end on April 24, 2016.
"Veritas does not agree with this declaration and, having obtained legal advice, will seek leave from the High Court to appeal the arbitrator's decision," the company said. "In the meantime, the existing preferred supply arrangement will continue on a business-as-usual basis."
The Kiwi Pacific Foods joint venture contributed earnings of $726,000 to Veritas in the year ended June 30, up from $415,000 a year earlier
The food and beverage company had a bumpy run this year, with the acquisitions of the Nosh Food Market and Better Beer Co more problematic than initially thought and leading to a 23% drop in annual profit and lower dividends to shareholders.
The meat patty supply dispute wasn't acknowledged in Veritas's annual report, which was released on September 28.
The company appointed Tim Cook as chairman earlier this week, a role he has been acting in since June 30. This week, it also announced Richard Sigley will leave the board at the end of its November 12 annual meeting.
Veritas shares were unchanged at 50c, and have dropped 58% this year.