Brambles Ltd., the world's largest supplier of pallets used to move and store goods, tumbled by a record in Sydney trading on concern it may lose contracts when Wal- Mart Stores Inc. reviews its supply agreement.

Brambles shares fell 10 percent, wiping A$1.5 billion ($1.4 billion) off the company's market value. It's the largest fall since the company combined its London and Sydney traded shares into a single Australian listing in November 2006. The stock price slump is an ``over-reaction,'' Sydney-based Brambles said.

Wal-Mart, the world's largest retailer, may deal directly with other pallet suppliers instead of relying on Brambles, the Australian company said today, threatening contracts in its largest market. Under their existing agreement, the U.S. retailer recommends its suppliers use the distinctive blue CHEP pallets for deliveries, making them easier to sort and return.

``There's a lot of uncertainty about what this means,'' said Rob Patterson, who manages the equivalent of $3.8 billion at Argo Investments Ltd. in Adelaide, including Brambles stock. ``It's certainly not a positive development.''

Brambles dropped A$1.03 to A$9 at the 4:10 p.m. market close in Sydney, cutting its market value to A$12.6 billion. The stock has slumped 22 percent this year, outpacing the 14 percent slide on Australia's benchmark S&P/ASX 200 Index.

`Dramatic Over-Reaction'

There has been ``a dramatic over-reaction to the announcement earlier today,'' Brambles Chief Executive Officer Mike Ihlein said in later statement. ``Brambles will make an appropriate announcement to the market as to the outcome of its discussions with Wal-Mart in due course.''

Sales from CHEP Americas rose 9 percent to $771.9 million in the six months ended Dec. 31, outpacing its 2 percent growth in Europe and 7 percent gain in the rest of the world. The pallet division accounted for 45 percent of Brambles's earnings.

Michael Sharp, a spokesman for Brambles in Sydney, didn't return calls seeking further comment.

Brambles is the biggest owner of reusable pallets in North America, where it competes with smaller providers such as Peco Pallet Inc., Ifco Systems NV and IGPS Company LLC.

CHEP, which counts General Motors Corp. and Procter & Gamble Co. as customers, owns 280 million reusable pallets and containers, which it rents to 300,000 companies. The pallets, which cost between A$16 and A$28 each to make, are wooden platforms used to move goods on forklifts.

The business evolved from the Australian government's Commonwealth Handling Equipment Pool it purchased in 1958. CHEP oversaw the movement of defense supplies during World War II.