Express Dairies has terminated its contract with First Milk, Britain's largest supplier to the fresh milk industry, in the midst of a bitter legal battle between the two firms. The agreement was estimated to be worth nearly £40m. First Milk chairman John Duncan said: "Express Dairies refused to take further deliveries after December 31 unless First Milk would agree a substantial price reduction. First Milk has rejected that ultimatum." But a spokesman for Express Dairies insisted: "There was no discussion about pricing. Express Dairies terminated the contract because of an unsatisfactory supply position." He said First Milk would not offer a firm supply commitment: "We did not know until September 28 whether they would supply us in October. For the whole of December they gave no firm commitment to supply us for the month." Express Dairies' action stems from a disagreement between First Milk and Express relating to milk supply to consumers from April 2001, which is now the subject of litigation. The group said it had secured a 12-month contract with another supplier ­ the Milk Group. As The Grocer went to press, an NFU delegation led by president Ben Gill met Express Dairies chief executive Neil Davidson and chairman designate Sir David Naish to discuss concerns over milk prices. {{NEWS }}