Ocado shares dropped significantly this morning, following reports over the weekend that British retailer Waitrose is prepared to take legal action against the online grocery service.
The threats come as a result of Ocado's discussions with Morrisons to help the retailer in the development of its online grocery format.
Waitrose managing director Mark Price stated over the weekend that his legal team would immediately study any arising contract between Ocado and Morrisons, explaining that he would never knowingly sign a contract with Ocado that agreed to the online grocer working with a rival. Following Price's comments, Ocado share's nose-dived by 11%. Ocado's shares had climbed during last week after it sought to reassure its investors that its supply agreement with Waitrose was not under threat.
Waitrose's supply agreement with Ocado runs until 2020, with a break clause in 2017.
