The a2 Milk Company

The a2 Milk Company Limited

Company type	Public
Industry	Dairy
Predecessor	A2 Corporation
Founded	2000 (2000)
Founder	Dr Corran McLachlan, Howard Paterson
Headquarters	New Zealand , New Zealand
Area served	New Zealand, Australia, United States, United Kingdom, China
Key people	David Bortolussi (CEO and managing director)
Products	Milk free from A1 protein, infant formulas, yogurt, whole milk powder, ice cream
Website	thea2milkcompany.com

The a2 Milk Company Limited—previously known as A2 Corporation—is a publicly traded enterprise headquartered in New Zealand that commercializes intellectual property tied to milk free from the A1 protein. Its product range, marketed under the a2 and a2 Milk brands, includes dairy items and infant formulas. The company is listed on both the NZX and ASX stock exchanges.

History

Established in 2000 by Dr Corran McLachlan, who investigated the health implications of A1 beta-casein, along with Howard Paterson, a notable dairy farmer and stakeholder in Fonterra, A2 Corporation created a genetic test to identify cows producing milk devoid of the A1 protein. Initially, the company concentrated on breeding herds that exclusively yielded A1 protein-free milk. However, Fonterra’s overwhelming market dominance—controlling 98% of New Zealand’s dairy farms—delayed the product’s launch due to contractual restrictions and patent conflicts.

Paterson spearheaded legal action against Fonterra, demanding health warnings on traditional milk products related to purported risks from A1 beta-casein and requesting transparency regarding pertinent research. This lawsuit posed a potential threat to New Zealand’s $14 billion dairy export sector and its global standing. Despite public apprehension, regulatory bodies affirmed the safety of conventional milk.

By April 2003, A2 Corporation had secured enough agreements with farmers to introduce A1 protein-free milk products into the New Zealand market under its own brands. Both founders passed away mid-2003: Paterson died in July during a business trip, followed by McLachlan’s death from cancer a month later.

In November 2003, after receiving regulatory advisories, A2 Corporation revised its health-related marketing claims to comply with New Zealand legislation prohibiting unsupported assertions about food health benefits. The company withdrew its legal proceedings against Fonterra by the end of that year and recommenced negotiations.

Following its May debut on the market, A2 Corporation faced financial difficulties leading to administration in October 2004 and liquidation in November, leaving substantial debts owed to farmers and processors. Furthermore, a federal government grant amounting to NZ$1.27 million was rescinded. To stabilize operations, the company formed a subsidiary named A2 Australia tasked with handling production and marketing under improved payment conditions for farmers.

In December 2004, A2 Corporation divested its stake in A2 Australia to Fraser & Neave—a major player in Asian food marketing—for roughly $1.1 million. This transaction enabled the company to concentrate on financial recovery while capitalizing on Fraser & Neave’s distribution networks across Australia and Asia.

Despite skepticism within the industry between 2004 and 2006, the company’s operations grew steadily. Competitors such as Parmalat and Dairy Australia maintained that no definitive scientific proof linked A1 proteins to health risks and cautioned that negative claims might adversely affect the wider dairy industry.

Restructuring and Leadership Transition at The a2 Milk Company

In 2006, A2 Corporation reacquired A2 Australia from Fraser & Neave. That same year, the company significantly reduced its losses to approximately $1 million, down from $9 million the previous year, while revenues nearly doubled. Despite this improvement, profitability was not anticipated for another three years.

By 2010, the company had made substantial progress commercially, producing 40 million litres of milk free from A1 protein. This milk was sourced from 12,000 cows certified as A2 producers throughout Australia and processed at four facilities located in Victoria, New South Wales, and Queensland. Additionally, yogurt products made from A1 protein-free milk were introduced to the Australian market under the a2 and a2 MILK brands.

In February 2011, A2 Corporation announced its first profitable half-year period, reporting a net profit of $894,000 for the six months ending December 2010. By December 2012, the company revealed plans to raise $20 million and pursue a listing on the main board of the New Zealand Stock Exchange to support expansion into Chinese infant formula and UK dairy markets. This public offering was completed in March 2013.

The year 2015 saw the launch of whole milk powder and ice cream products free of A1 protein. During the 2014–2015 fiscal year, revenue from Australian and New Zealand operations increased by 40%, accompanied by a remarkable 650% surge in sales of a2-branded infant formula.

In December 2017, Geoffrey Babidge declared his intention to retire as CEO. Jayne Hrdlicka, then leading a Qantas subsidiary, was appointed as his successor and took over in July 2018 amid robust growth fueled by Chinese market demand and heightened investments targeting expansion in China and the United States. Hrdlicka stepped down in December 2019 due to personal reasons, with Babidge returning temporarily as interim CEO.

David Bortolussi was named CEO and managing director in August 2020.

A2 milk

The a2 Corporation promotes milk that exclusively contains the A2 variant of beta-casein protein, asserting it offers health advantages over conventional milk containing A1 proteins. Nonetheless, a 2009 assessment by the European Food Safety Authority (EFSA) concluded that there was insufficient scientific proof linking bioactive peptides in regular milk to adverse health effects.

A1 and A2 beta-casein represent genetic variants differing by a single amino acid. The A1 variant predominates in cow’s milk across Europe (with France as an exception), as well as in the United States, Australia, and New Zealand. To support its product differentiation strategy, the a2 Milk Company developed a genetic testing method to identify cows producing solely A2 beta-casein. This enabled licensing partnerships with producers supplying milk free from A1 protein.

Intellectual property

A2 Corporation acquired licensing rights to patents originally filed in the 1990s by the New Zealand Dairy Board and secured proprietary patents related to genetic testing for beta-casein variants along with potential health implications associated with standard milk consumption. By 2012, it had established an extensive global intellectual property portfolio encompassing trademarks, trade secrets, and patents covering product formulations, genetic testing technologies, herd management techniques, milk composition analyses, dietary supplements containing A2 beta-casein, and therapeutic uses for A1 protein-free products.

The a2 Milk Company continues to broaden its intellectual property assets while investing in scientific research on the benefits of A2 protein. In September 2017, it received regulatory clearance to maintain sales of its products within China, thereby strengthening its foothold in this crucial market.

New Zealand and Australia

Following the release of Keith Woodford's Devil in the Milk in 2007, which raised concerns about potential health issues linked to A1 beta-casein, sales of A1 protein-free milk experienced a significant increase in Australia and New Zealand. This development led the New Zealand Food Safety Authority to request a scientific evaluation from the European Food Safety Authority (EFSA). In 2009, EFSA published a report stating that there was no confirmed causal relationship between BCM7 peptides derived from milk proteins and non-communicable illnesses.

The a2 Milk Company introduced its infant formula to the New Zealand and Australian markets in September 2013, followed by the launch of an A1 protein-free thickened cream under the a2 and a2 MILK brands in January 2014. In April 2014, the company changed its name from A2 Corporation to the a2 Milk Company Limited and held an estimated 8% share of Australia's milk market.

In 2014, Lion, a beverage and food company in Australasia owned by Kirin, reintroduced its Pura Milk product with packaging labeled "Naturally contains A2 protein" as a strategic move to compete against a2 Milk.

The a2 Milk Company pursued a dual listing on the Australian Securities Exchange in November 2014 to attract investment from Australian shareholders and improve liquidity. The company successfully completed its ASX listing on 30 March 2015.

United States

In August 2003, The a2 Milk Company granted patent and trademark licenses to Ideasphere Incorporated (ISI), a US-based entity, for marketing A1 protein-free products within North America. ISI expanded its portfolio by acquiring Twinlab in September 2003 and further grew through additional purchases in the dietary supplement sector. In June 2005, ISI partnered with A2 Corporation to establish the joint venture a2 Milk Company LLC.

By April 2007, this joint venture licensed Original Foods Company to distribute A1 protein-free products under its own brand across several midwestern states through the Hy-Vee supermarket network.

After resolving disputes with Original Foods by 2009, the joint venture regained exclusive rights to the US market. In 2010, The a2 Milk Company bought over 99% of ISI’s stake in the venture, obtaining full ownership of its US marketing activities.

The company holds US trademarks such as "A2" and "a2 MILK" for dairy products. By 2018, its offerings were available in roughly 9,000 retail outlets across the United States, demonstrating substantial market reach.

United Kingdom

In November 2011, The a2 Milk Company partnered with British dairy supplier Müller Wiseman Dairies (MWD) to jointly process, market, and sell A1 protein-free milk products in both the UK and Ireland. By mid-2014, approximately 20 dedicated farms were supplying milk for UK-based processing operations. During its initial year, the venture achieved sales totaling £1 million through distribution in around 1,000 stores. On 1 January 2014, The a2 Milk Company acquired MWD’s shareholding in this joint venture for a nominal sum, thereby assuming full ownership.

In October 2019, The a2 Milk Company announced it would cease offering a2 milk products in the UK market, with availability ending by late November 2019.

China

The export of The a2 Milk Company's infant formula product, a2 Platinum, to China began in 2013. In response to the 2008 Chinese milk safety scandal, demand for such products increased markedly. After obtaining Chinese export approval, the company has explored establishing local manufacturing facilities for baby formula to meet rising consumer demand. Over four months, infant formula sales in China surged by approximately 330%, indicating rapid market expansion.

See also

• Dairy farming in New Zealand