The a2 Milk Company Limited (previously known as A2 Corporation) is a New Zealand 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. It is cross-listed in both the NZX and ASX.
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, a dairy cooperative. The company commercialised a genetic test to determine whether a cow will produce milk without the A1 protein, and to market A1 protein-free milk.Australian Broadcasting Corporation. 31 March 2003 Transcript of "White Mischief", an episode of Four Corners, an investigative journalism series.Staff, New Zealand Herald. 14 May 2001 A2 protein milk supply on horizon
Initially, A2 Corporation focused on dairy farm breeding programmes 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.Penny Smith for Just-food. 2 July 2003 A2 milk launched as controversy churns on 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 2002 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 to issue statements confirming the safety of conventional milk.Supporting documents for "White Mischief" storyOffice of the Minister of Food Safety, New Zealand Food Safety Authority. 27 November 2007 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.New Zealand Stock Exchange. a2 Milk Company Overview 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,Staff, New Zealand Herald. 5 July 2003 Obituary: Howard Paterson 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 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 Corporation 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 in October and was liquidated in November, owing farmers and processors tens of thousands of dollars.Shelley Lloyd for the Australian Broadcasting Corporation. 17 November 2004 A2 milk liquidates A NZ$1.27 million federal government grant awarded to the company in August as part of the Regional Partnerships Program was also cancelled.Australian Senate finance and public administration references committee report on Regional Partnerships and Sustainable Regions programs, October 2005, pages xiv, 97–100 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, a food marketing 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 2004 Quick sale likely for A2 Corp 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 (the national association of the Australian dairy industry) and market competitors such as Parmalat 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.A2 Corporation Press Release 18 February 2011 A2 Corp Declares a Maiden Profit
In December 2012 A2 Corporation announced it would attempt to raise $20 million and list on the New Zealand Stock Exchange main board,Georgina Bond for the National Business Review. 5 December 2012 A2 Corp sets sights on NZX with $20 million equity raising and that it would use the funds to grow its Chinese infant formula and UK milk businesses. It listed in March 2013.Staff, The Headliner. 7 March 2013. A2 Corporation to Step Up
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. 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 (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. 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 to determine what form of beta-casein cows produce in milk and concerning potential adverse health consequences of standard milk.EP0789842A1 Google patentsPhilippa Stevenson for the New Zealand Herald. 21 December 2000 A2 Corp pays $8m for milk patent rights
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 with A2 beta-casein, and even therapeutic uses of A1 protein-free products.Geoffrey Babidge, Managing Director & CEO of A2 Corp. April 2012 A2 Corporation Presentation
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;A2 Corporation Press Release, November 2007. A2 Milk Sales In NZ / Australia Increase Substantially 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 2009 EFSA reveals milk protein safety conclusions 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.Press Release, A2 Corporation. 31 March 2014 A2 changes name