South African dairy group Clover has decided not to renew contracts it has to supply and provide services former local venture partner Danone.

Clover supplies raw milk, manufactures and packages custard, as well as providing services in sales, merchandising and distribution to the French food giant in South Africa.

The two companies were venture partners in the country but in 2009 Danone bought out Clover. The South African firm continued to supply Danone with commodities and provide services to the businesses.

Clover said the "majority" of the contracts end next December. It said the end of the contracts was "unlikely to have a materially negative impact on Clover's earnings potential in the medium to long-term".

It said it could "pursue opportunities" in new product development and other distribution "prospects".