GLG Life Tech and Weider Global Nutrition (WGN) struck a deal in September last year, ahead of FDA GRAS (generally recognized as safe) status being achieved for stevia extracts in food and drinks in December. Under the arrangement, the two companies agreed to market the sweetener together, taking advantage of Weider’s expertise in marketing and distribution of nutritional products, and GLG Life Tech’s knowledge of stevia. The joint business is called GLG Weider Sweet Naturals Corp (or Sweet Naturals) and initially focused on tabletop stevia sweeteners before moving into food ingredients following FDA GRAS last year.
But WGN started legal proceedings in a British Columbia Supreme Court on November 4, claiming that by setting up a separate sales team GLG had breached Sweet Naturals’ shareholders’ agreement, and accused it of misrepresentations by GLG and its chairman/CEO, and of a breach of trust.
Weider said in a statement: “In their Shareholders' Agreement, GLG and Weider stated their intention was to maximize stevia-based product sales through Sweet Naturals throughout the world… Although Weider is hopeful it can resolve its dispute with GLG – and improve Sweet Naturals' service to its customers – Weider intends to maintain the lawsuit to protect and enforce its interests.”
However, GLG claims that the assertion that WGN is entitled to a larger share of the company’s stevia business is contradicted by specific allowances in the shareholders’ agreement.
GLG said in a statement: “The Company remains of the view that the claims are wholly lacking in merit. The Company seeks to have the claims dismissed with costs. The Company has also instituted a counterclaim for damages against WGN as a result of the commencement of the action.”
Weider said that it intends to continue marketing stevia products through Sweet Naturals, and that GLG has said it will continue to supply the company.