Schiff Nutrition Group has lodged a complaint in a Utah District Court, claiming damages and court costs from Neptune, an action that Neptune has responded to by requesting a trial by jury with a set of counterclaims in the same Utah court.
The conflict centers on the Neptune being forced to shut down over the summer as it expanded its operations to cope with increasing demand.
Schiff alleges Neptune informed it in March that it would be closing for “two or three weeks”, but when the closure continued, says Neptune failed to answer enquiries as to the state of play with the facility.
The Utah company alleges Neptune three times defaulted on an order of 4000kg of krill oil and then delivered a 500kg consignment it claimed was inferior quality, costing it in the vicinity of $1m in lost orders, reputation, extra processing costs and expense of sourcing another supplier.
In its defence and counter suit, Neptune alleges Schiff falsified purchase orders by increasing order quantities, on one occasion from 2500kg to 4000kg, and another from 3000kg to 4000kg.
Neptune says it in March informed Schiff that it would be closing for 5-6 weeks and that it had, in 2008, requested Schiff provide it with volume forecasts to prepare for the shut-down. Schiff refused to do this, it alleges.
Neptune asserts it “consistently and regularly” responded to Schiff’s enquiries and was planning to ship the additional 3500kg in August.
Neptune admitted that the batch it sent did not meet initial specifications but said Schiff knew of and accepted this fact, indeed, “insisted upon its delivery”.
Both companies refused to comment while the action was ongoing.
Neptune is the world leader in krill, and its branded NKO version contains about 38-50g/100g phospholipids, 15-19g/100g of EPA (eicosapentaenoic acid ) and 7-16g/100g of DHA (docosahexaenoic acid), depending on the dose in question.