Murray Goulburn drops a deal with Mead Johnson on infant formula

Wang Zhao/AFP/Getty Images

Murray Goulburn, the largest dairy processor in Australia, has dissolved a strategic alliance with US-based Mead Johnson Nutrition to create baby formula for the Asian market.

A short time ago, its shares were up 1% to $0.96.

Interim CEO David Mallinson says Murray Goulburn will now review its strategy for its nutritionals investment.

The two companies announced a framework agreement to establish a strategic supply alliance in April.

The mutual decision to terminate the agreement comes after reports of new regulations blocking supply of infant formula to China.

Murray Goulburn’s business has been hit by a global milk glut. Revenue was down 3.3% in 2016 to $2.8 billion.

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