Synlait Milk said the registration process required to launch Munchkin Inc's Grass Fed infant formula in the US has been put on hold to allow the company to look at other options.
Synlait "has been informed that the clinical study has been put on hold to allow Munchkin to explore other options in the US," it said.
Synalit chief executive Leon Clement said Munchkin has not terminated its supply agreement with Synlait. "For other markets were Grass Fed is sold, the relationship continues with business as usual," he said.
Clement said the announcement will not have a material impact on Synlait's forecast infant formula volumes. In March it said it was on track to meet its full-year canned infant formula volume guidance of 41,000 – 45,000 metric tonnes, with significantly higher volumes forecast to be delivered in the second half of the financial year.
Synlait shares were unchanged at $10.20.
The Synlait-Munchkin partnership was first announced in 2015 when Synlait teamed up with Munchkin to launch the new grass-fed brand into the US and China that would exclusively manufactured by Synlait.
In August 2017, it said the two companies were continuing to work through an FDA process that would take a further four to 12 months. The stringent process, known as a New Infant Formula Notification, includes a range of trials, audits and documentation.