The a2 Milk Company Limited (previously known as A2 Corporation) is a dual listed
NZX
New Zealand's Exchange (), known commonly as the NZX, is the national stock exchange for New Zealand and a publicly owned company. NZX is the parent company of Smartshares, and Wealth Technologies.
On 30 August 2020, the NZX had a total of ...
and
ASX 50
The S&P/ASX 50 Index is a stock market index of Australian stocks listed on the Australian Securities Exchange from Standard & Poor's.
It is a part of the S&P Global 1200.
While the "ASX 50" often simply refers to the 50 largest compani ...
public listed company that commercialises intellectual property relating to A1 protein-free milk that is sold under the a2 and a2 Milk brands, as well as the milk and related products such as infant formula.
History
The a2 Milk Company is the successor of A2 Corporation Limited, a New Zealand company founded in 2000 by
Dr Corran McLachlan, who was researching health effects of A1 beta-casein, and Howard Paterson, who was one of New Zealand's richest men, a significant dairy farmer, and a stakeholder in
Fonterra
Fonterra Co-operative Group Limited is a New Zealand multinational publicly traded dairy co-operative owned by around 9,000 New Zealand farmers. The company is responsible for approximately 30% of the world's dairy exports and with revenue exce ...
, a
dairy cooperative.
The company commercialised a
genetic test
Genetic testing, also known as DNA testing, is used to identify changes in DNA sequence or chromosome structure. Genetic testing can also include measuring the results of genetic changes, such as RNA analysis as an output of gene expression, or ...
to determine whether a cow will produce milk without the A1 protein, and to market A1 protein-free milk.
[Australian Broadcasting Corporation. 31 March 200]
Transcript of "White Mischief"
an episode
of ''Four Corners'', an investigative journalism series.[Staff, New Zealand Herald. 14 May 200]
A2 protein milk supply on horizon
/ref>
Initially, A2 Corporation focused on dairy farm breeding program
A breeding program is the planned breeding of a group of animals or plants, usually involving at least several individuals and extending over several generations. There are a couple of breeding methods, such as artificial (which is man made) and ...
s to develop herds that would produce only A1 protein-free milk. However the launch of A1 protein-free milk was delayed by opposition from Fonterra, which had protected contracts under New Zealand law with about 98% of New Zealand dairy farms. Seeking leverage in the battle with Fonterra over access to farmers, and over patent rights,[ Paterson led the company into litigation against Fonterra, asking the New Zealand High Court to order Fonterra to put health warnings on its conventional milk concerning risks of type 1 diabetes, heart disease, autism and schizophrenia due to the presence of A1 beta-casein, and to force Fonterra to publicly disclose all the information it had about the links between A1 beta-casein and health risks.][Deborah Hill Cone for Share Chat 1 November 200]
A2 accuses dairy giant of suppressing milk defects
Quote: "The lawsuit risks inflicting catastrophic damage to New Zealand's international reputation and foreign earnings as Fonterra turns over $14 billion and makes 20% of the country's total offshore receipts. As if that would not be enough of a PR disaster as the country tries to maintain its position as a clean, green food producer...." The litigation threatened New Zealand's economy and international reputation as at the time Fonterra was responsible for 20% of New Zealand's exports.[ The press over the litigation and public concern over the claims of A2 Corporation led the New Zealand Food Safety Authority and the Ministry of Health and the ]Food Standards Australia New Zealand
Food Standards Australia New Zealand (FSANZ) (Māori: ''Te Mana Kounga Kai – Ahitereiria me Aotearoa''), formerly Australia New Zealand Food Authority (ANZFA), is the statutory authority in the Australian Government Health portfolio that is ...
to issue statements confirming the safety of conventional milk.[Office of the Minister of Food Safety, New Zealand Food Safety Authority. 27 November 200]
A1-A2 Milk: Arrangements for Upcoming Reviews
A2 Corporation was able to obtain agreements with enough dairy farmers to launch A1 protein-free milk under its a2 and a2 MILK brands in New Zealand at the end of April 2003. In the middle of 2003, both founders of the company died. In July, Paterson was found dead in his hotel room during a business trip at the age of 50, and a month later Dr Corran McLachlan died of cancer at the age of 59.[ In New Zealand it is illegal to make health claims about a food product without providing scientific evidence and registering the food as a medicine, and in November 2003 the New Zealand ]Commerce Commission
The Commerce Commission ( mi, Te Komihana Tauhokohoko) is a New Zealand government agency with responsibility for enforcing legislation that relates to competition in the country's markets, fair trading and consumer credit contracts, and regula ...
advised that A2 Corporation Ltd and its licensed producers of A1 protein-free milk had agreed to amend the health claims in their promotional material following a warning from the commission. By end of 2003 the weakened A2 Corporation had withdrawn the litigation against Fonterra and negotiations had resumed.[A2 Corporatio]
A2 Annual Report for Year Ending March 2003
Note: Report was apparently published at the end of 2003[
The company, which had been in a tenuous financial situation since beginning trading in May, went into ]administration
Administration may refer to:
Management of organizations
* Management, the act of directing people towards accomplishing a goal
** Administrative assistant, Administrative Assistant, traditionally known as a Secretary, or also known as an admini ...
in October[ and was ]liquidated
Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistrib ...
in November, owing farmers and processors tens of thousands of dollars.[Shelley Lloyd for the Australian Broadcasting Corporation. 17 November 200]
A2 milk liquidates
/ref> A NZ$1.27 million federal government grant awarded to the company in August as part of the Regional Partnerships Program was also cancelled. A2 Corporation set up a new subsidiary and licensee, A2 Australia, to market and produce its product. A2 Australia established new contracts with the dairy farmers who had A1 protein-free herds, promising better payment terms—a week in advance instead of once per month, after shipment.
In December, A2 Corporation sold its interests in A2 Australia to Fraser & Neave
Fraser and Neave, Limited (F&N) is a Singaporean food and beverage, publishing and former brewing and property industries conglomerate. It is owned by Thai Chinese billionaire business magnate Charoen Sirivadhanabhakdi.
Listed in Singapore, the ...
, a food marketing
Food marketing brings together the food producer and the consumer through a chain of marketing activities.
Background
Pomeranz & Adler, 2015, defines food marketing as a chain of marketing activities that takes place within the food system ...
giant in Asian markets, for about $1.1 million. A2 Corporation had lost about $1.3 million for 2004, the same as it has lost the year before; the sale allowed A2 Corporation to rely on Fraser & Neave to build the Australian and Asian businesses.[Ellen Read for the New Zealand Herald. 30 December 200]
Quick sale likely for A2 Corp
/ref> A2 Corporation focused on recovering from the deaths of its founders organizationally and financially, relied on its New Zealand licensees to develop the New Zealand market, and turned its focus to developing overseas markets.[
Between 2004 and 2006, A2 Corporation business continued to grow. In response, ]Dairy Australia
Dairy Australia is the Australian national body for the dairy industry, and a Research and development corporation (RDC). It is mainly funded by the Dairy Services Levy, a tax paid by farmers based on milk production. It also acts as a funding bo ...
(the national association of the Australian dairy industry) and market competitors such as Parmalat
Parmalat S.p.A. is a dairy and food corporation which is a subsidiary of French multinational company Lactalis. It was founded by Calisto Tanzi in 1961.
Having become the leading global company in the production of long-life milk using ultra-h ...
have consistently stated that there is no conclusive scientific evidence to suggest A1 proteins are dangerous and have warned that criticism of normal milk is damaging the entire dairy industry.
Reconsolidation and succession as The a2 Milk Company
In 2006, A2 Corporation was on a sound enough footing to buy back A2 Australia from Fraser & Neave. In 2006, it lost about $1 million, after having lost $9 million the year before, but revenues had approximately doubled. In that year it warned shareholders not to expect profit for another three years.
Commercial development proceeded, and by 2010 some 40 million litres of A1 protein-free milk were being produced by 12,000 A2-certified cows across Australia, with milk processed at four plants in Victoria, New South Wales and Queensland, and yoghurt made with A1 protein-free milk went on the market in Australia in April 2010 under the a2 and a2 MILK brands.
In February 2011 A2 Corporation announced it had a made a profit over a half-year for the first time; in the six months ending 31 December 2010, it made a net $894,000, or 17 cents per share.
In December 2012 A2 Corporation announced it would attempt to raise $20 million and list on the New Zealand Stock Exchange main board, and that it would use the funds to grow its Chinese infant formula and UK milk businesses. It listed in March 2013.
In 2015, A1 protein-free whole milk powder and A1 protein-free ice cream products were launched. For the 2014–2015 Financial year, The a2 Milk Company reported its Australian and New Zealand segment revenue grew by 40% vs pcp; and sales on a2 infant formula increased by 650%.
In December 2017 the company announced that in the summer of 2018 Geoffrey Babidge, who had been nearing retirement age, would step down and Jayne Hrdlicka would take over as CEO; at that time she was CEO of a subsidiary of Qantas
Qantas Airways Limited ( ) is the flag carrier of Australia and the country's largest airline by fleet size, international flights, and international destinations. It is the world's third-oldest airline still in operation, having been founded ...
. She took over in July 2018. At that time the company was experiencing strong growth via sales in China and had ramped up spending to further increase Chinese sales and to expand the US market. Hrdlicka resigned as CEO in December 2019, after her husband was found to have a kidney tumour. On her departure Geoffrey Babidge returned, as interim CEO.[
In August 2020 David Bortolussi was appointed CEO and managing director.
]
A2 milk
The a2 Corporation claims that milk containing A1 proteins is harmful, but a 2009 European Food Safety Authority
The European Food Safety Authority (EFSA) is the agency of the European Union (EU) that provides independent scientific advice and communicates on existing and emerging risks associated with the food chain. EFSA was established in February 2002, ...
(EFSA) review of scientific literature found there was insufficient evidence to prove that bioactive peptides in standard milk have a negative effect on health.
A1 and A2 beta-casein are genetic variants of the beta-casein milk protein that differ by one amino acid
Amino acids are organic compounds that contain both amino and carboxylic acid functional groups. Although hundreds of amino acids exist in nature, by far the most important are the alpha-amino acids, which comprise proteins. Only 22 alpha am ...
. The A1 beta-casein type is the most common type found in cow's milk in Europe (excluding France), the US, Australia and New Zealand. A genetic test, developed by the A2 Milk Company, determines whether a cow produces the A2 or A1 type protein in its milk. The test allows the a2 Milk Company to license milk producers once proven their cows produce only A2 beta-casein protein in their milk, to the exclusion of the A1 beta-casein protein type.[
]
Intellectual property
A2 Corporation licensed patents filed in the 1990s by the New Zealand Dairy Board, and filed its own patents on genetic tests
Genetic testing, also known as DNA testing, is used to identify changes in DNA sequence or chromosome structure. Genetic testing can also include measuring the results of genetic changes, such as RNA analysis as an output of gene expression, or ...
to determine what form of beta-casein cows produce in milk, and concerning potential adverse health consequences of standard milk.
By 2012 A2 Corporation had developed a worldwide suite of intellectual property, including trademarks, trade secrets, and patents covering products, the genetic test and methods to develop A1 protein-free producing herds, as well as methods to check the protein content and fatty acid content of milk, dietary supplements
A dietary supplement is a manufactured product intended to supplement one's diet by taking a pill (pharmacy), pill, capsule (pharmacy), capsule, tablet (pharmacy), tablet, powder, or liquid. A supplement can provide nutrients either extr ...
with A2 beta-casein, and even therapeutic uses of A1 protein-free products.
The a2 Milk Company continues to develop a portfolio of intellectual property, including trademarks and patents. The a2 Milk Company also invests in targeted research and development associated with the benefits of the A2 protein. In September 2017, it was reported that the a2 Milk Company got approval to keep selling its products in China.
Markets
New Zealand and Australia
Sales of A1 protein-free milk in Australia and New Zealand boosted significantly following 2007, after the publication of a book, ''Devil in the Milk'' by Keith Woodford, about A1 beta-casein and its perceived dangers to health; the book prompted the New Zealand Food Safety Authority to propose again reviewing the science to address consumer concerns that milk containing both the A1 and A2 proteins might be harmful.[ It asked the European Food Safety Authority (EFSA) to undertake such a review.][Sarah Hills for Food Navigator. 9 February 200]
EFSA reveals milk protein safety conclusions
/ref> The EFSA report, released in 2009, found that "a cause and effect relationship is not established between the dietary intake of BCM7 (beta-casomorphin-7), related peptides or their possible protein precursors and non-communicable diseases".[
The a2 Milk Company launched an infant formula in New Zealand and Australia in September 2013][ and an A1 protein-free thickened cream was launched in January 2014 under the a2 and a2 MILK brands.
A2 Corporation changed its name to The a2 Milk Company Limited effective April 2014, and at that time had about 8% market share of the milk products market in Australia.][
In 2014 ]Lion
The lion (''Panthera leo'') is a large Felidae, cat of the genus ''Panthera'' native to Africa and India. It has a muscular, broad-chested body; short, rounded head; round ears; and a hairy tuft at the end of its tail. It is sexually dimorphi ...
, a beverage and food company that operates in Australia and New Zealand and is owned by Kirin, relaunched its Pura Milk
Pura may refer to:
Places
* Pura, Kushtagi, a village in Koppal district, Karnataka, India
* Pura, Iran, a village in Mazandaran Province, Iran
* Pura, Tarlac, a municipality in the Philippines
* Pura, Switzerland, a municipality in Ticino, Swi ...
product with a new label stating: "Naturally contains A2 protein."
The a2 Milk Company announced in November 2014 that it had begun the application process for a dual listing on the Australian Securities Exchange
Australian Securities Exchange Ltd or ASX, is an Australian public company that operates Australia's primary securities exchange, the Australian Securities Exchange (sometimes referred to outside of Australia as, or confused within Australia as ...
in a bid to open its register to Australian investors and boost the liquidity of its shares. The company successfully listed in Australia on 30 March 2015.
United States
In August 2003, The a2 Milk Company exclusively licensed patent and trademark rights to US-based Ideasphere Incorporated (ISI) to market A1 protein-free products in North America. ISI acquired Twinlab
Twinlab Consolidated Corporation is an American company which manufactures and markets vitamins, minerals, and bodybuilding supplements. Twinlab is based in Boca Raton, Florida.
Twinlab currently produces more than 500 different products. in September 2003, followed by another string of acquisitions in the dietary supplement
A dietary supplement is a manufactured product intended to supplement one's diet by taking a pill, capsule, tablet, powder, or liquid. A supplement can provide nutrients either extracted from food sources or that are synthetic in order ...
market. In June 2005, ISI and A2 Corporation agreed to form a joint venture, a2 Milk Company LLC.
In April 2007 A2 Corporation announced a deal in which the joint venture would license rights to the Original Foods Company, whose branding the A1 protein-free product would carry, and in which the product would be sold in several midwestern states
The Midwestern United States, also referred to as the Midwest or the American Midwest, is one of four census regions of the United States Census Bureau (also known as "Region 2"). It occupies the northern central part of the United States. I ...
through the Hy-Vee
Hy-Vee, Inc. () is an employee-owned chain of supermarkets in the Midwestern and Southern United States, with more than 280 locations in Iowa, Illinois, Kansas, Minnesota, Missouri, Nebraska, South Dakota, Wisconsin, and soon Indiana, Kentucky, ...
supermarket chain.
In A2 Corporation's 2009 Annual Report, the company announced that the joint venture had regained all rights to the US market through a settlement with the Original Foods Company. In 2010 The a2 Milk Company bought out more than 99% of ISI's share in the joint venture.
The a2 Milk Company is the owner of US trademarks that include the term A2 and/or A2 MILK for milk and other diary related products, including a trademark for "a2 MILK." The a2 Milk Company announced in 2018 that it now had around 9,000 stores in its distribution network in the United States that sell its a2 and a2 MILK branded products.
United Kingdom
The a2 Milk Company formed a joint venture with a major British milk supplier, Müller Wiseman Dairies Müller may refer to:
* ''Die schöne Müllerin'' (1823) (sometimes referred to as ''Müllerlieder''; ''Müllerin'' is a female miller) is a song cycle with words by Wilhelm Müller and music by Franz Schubert
* Doctor Müller, fictional character ...
(MWD), in November 2011 to process, market and sell its A1 protein-free products in Britain and Ireland. In June 2014 The a2 Milk Company reported it had 20 dedicated farms supplying milk for processing in the UK. In its first year the milk recorded £1 million in sales through 1,000 stores. On 1 January 2014, The a2 Milk Company exited its joint venture with MWD by acquiring MWD's stake for a "nominal" amount.
In October 2019, the a2 Milk Company announced that it had decided to "discontinue a2 milk in the UK" and its products would only be available until the end of November 2019.
China
The first consignments of The a2 Milk Company infant formula – a2 Platinum were sent to China in 2013. Exports to China have increased dramatically following the 2008 Chinese milk scandal
The 2008 Chinese milk scandal was a significant Food safety incidents in China, food safety incident in China. The scandal involved Sanlu Group, Sanlu Group's milk and infant formula along with other food materials and components being adultera ...
.
References
External links
*
{{DEFAULTSORT:a2 Milk Company, The
Food and drink companies based in Auckland
Companies listed on the Australian Securities Exchange
Companies listed on the New Zealand Exchange
Agriculture companies of Australia
Dairy products companies of New Zealand
Dairy products companies of Australia
Baby food manufacturers
Product certification
Australian brands
New Zealand companies established in 2000