US natural and specialty foods distributor Tree of Life has announced that it has been unable to reach agreement with US grocery retailer Ralphs on the terms of any future business relationship.

Therefore, Tree of Life will discontinue its relationship as Ralphs' distributor of natural and specialty food products by the end of the year. Based on mutual agreements to ensure a smooth transition, the change is expected have minimal impact on Tree of Life's 2005 financials.

"For the past several months Tree of Life and Ralphs have held discussions about the possible terms of a future business relationship. Ultimately we were unable to reach terms that would have been accretive to our strategic goals. Until the end of the year, Tree of Life will continue to provide Ralphs with the support necessary to facilitate an orderly transition to another supplier," said Brian Evers, president of the west region of Tree of Life, part of Dutch food company Wessanen.

Tree of Life said that although near term modifications will be required, the change in the company's business relationship with Ralphs is expected to have little financial or strategic impact.

"The scale of our Southern California operations without the Ralphs business is still on par with many of our other distribution centres throughout North America," said Evers. "We anticipate minimal impact from this announcement on our 2005 performance and no impact on achieving our long-term strategic goals. While we regret the outcome of our negotiations with Ralphs, Tree of Life remains fully committed to the long-term growth of its business in the California market."

Ralphs is part of US grocery retailer Kroger.