UK supermarket chain and takeover target Safeway is reported to be involved in a legal dispute with UK-based Express Dairies over a milk supply contract.

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Express Dairies, which recently announced it is to merge with Arla Foods, started legal proceedings in the High Court two weeks ago claiming that Safeway had breached a milk supply contract, reported the Telegraph.


Safeway, which could be forced to pay out as much as £11m (US$17.3m) in damages, said it would vigorously defend the action.


The claim, which is reportedly detailed in the Express-Arla merger document, alleges Safeway was in breach of contract when it cancelled its three-year milk supply agreement with Express in January this year, 18 months early.

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