Ocean Grown Abalone facing legal action from supplier

Bremer Bay-based 888 Abalone has accused Ocean Grown Abalone of breaching a supply agreement by planning a future development for a hatchery.

In a statement, Ocean Grown said it received a letter from lawyers representing 888, which is a key supplier of juvenile abalone to the Fremantle-based company, on Wednesday.

The letter alleged that Ocean Grown’s ASX announcement on February 27 constituted an anticipatory breach of a supply agreement between the two companies.

On February 27, Ocean Grown announced it would examine options for the future development of an onshore abalone hatchery and grow-out facility.

Today, Ocean Grown said 888’s allegations did not have merit.

“OGA intends to continue to comply with all of its contractual obligations under the terms of the supply agreement and to continue its negotiations and studies as outlined in the OGA announcement dated February 27 2019,” Ocean Grown said.

Shares in Ocean Grown were down 5.56 per cent to trade at 17 cents each at 2.36pm AEDT