The a2 Milk Company

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.Initially, A2 Corporation focused on dairy farm breeding programs 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. 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.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 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.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. 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, 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. 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 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.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. 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.