SIGMA Healthcare Limited this morning confirmed it had entered into a "formal negotiation period" with My Chemist/Chemist Warehouse Group with the aim of seeking a commercial resolution of issues under dispute.
Sigma flagged the issue two months ago (PD 24 May), launching legal action because of a threat by My Chemist/Chemist Warehouse to acquire generic products from an alternative wholesaler.
Sigma maintained that under its existing agreement with the retailing group it is not entitled to acquire products from another CSO wholesaler, but also warned the move could impact its profits by as much as $10 million this year.
In an ASX update this morning Sigma said following ongoing discussions, "if a commercial resolution is not reached the parties have agreed to confidential and binding mediation and arbitration," adding it would now discontinue legal proceedings.
"Sigma values the long term relationship with MC/CW and continues to provide operational support in accordance with the terms of the current supply agreement which runs to June 2019," the company said.
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