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Tag: A2

  • A2 Milk Triumphs in Trademark Tussle: Historic Australian Court Victory Over Care A2 Plus

    A2 Milk Triumphs in Trademark Tussle: Historic Australian Court Victory Over Care A2 Plus

    The Federal Court of Australia has ruled in favor of The A2 Milk Company in a trademark lawsuit against its competitor, Care A2 Plus. The A2 Milk Company, a dairy company based in New Zealand, has several registered trademarks in Australia, including ‘A2 Milk’ and ‘A2’, that encompass a variety of products such as milk and infant formula.

    Care A2 Plus’s Alleged Infringement

    Care A2 Plus, another infant and toddler formula producer, markets its products in Australia under the branding ‘Care A2+’. The lawsuit was initially filed by A2 Milk against Care A2 Plus in 2023. The plaintiff accused Care A2 Plus of violating its trademark rights in contravention of the Australian Consumer Law.

    The A2 Milk Company asserted that Care A2 Plus consciously used the similar ‘A2/A2+’ branding even after requests to cease. The plaintiff also claimed that Care A2 Plus indulged in litigation strategies that escalated costs, and subsequently sought either damages or an account of profits.

    Court’s Stance on the Dispute

    At a hearing that took place this past Thursday, the court backed The A2 Milk Company. However, the court mandated both parties to present further submissions before it pronounces the final verdict concerning relief, including damages and costs.

    Despite Care A2 Plus’s claims that its packing was entirely distinctive, the court maintained that the conspicuous ‘A2/A2+’ branding could potentially indicate a connection to The A2 Milk Company.

    The court justified its ruling by stating that an average consumer encountering Care A2 Plus’s products for the first time would likely presume a connection with The A2 Milk Company. The consumer might even think that these products are part of The A2 Milk Company’s range or endorsed by the company.

    Questions & Answers

    What was the dispute between The A2 Milk Company and Care A2 Plus about?
    The dispute was about Care A2 Plus allegedly infringing on The A2 Milk Company’s registered trademarks by using a similar ‘A2/A2+’ branding.

    What did The A2 Milk Company seek from the lawsuit?
    The A2 Milk Company sought either damages or an account of profits from Care A2 Plus for using a similar branding and escalating litigation costs.

    What was the court’s ruling in the trademark dispute?
    The court ruled in favor of The A2 Milk Company, stating that Care A2 Plus’s ‘A2/A2+’ branding might lead consumers to believe that there is a connection between the two companies.

  • A2 Milk Faces Financial Downgrade Amid Middle East Supply Chain Hurdles and Stricter Chinese Regulations

    A2 Milk Faces Financial Downgrade Amid Middle East Supply Chain Hurdles and Stricter Chinese Regulations

    The A2 Milk Company has acknowledged a number of issues currently affecting its supply chain, leading to a downgrade in its financial outlook.

    Strong Demand versus Supply Chain Challenges

    While experiencing robust demand, especially for their infant milk formula products in China, The A2 Milk Company is facing supply chain difficulties. The company noted that the cost and availability of extra air freight to expedite product shipments to China has been indirectly influenced by the ongoing conflict in the Middle East. It also reported that inventory levels have been low due to issues at its manufacturer, Synlait Milk.

    Synlait Milk responded by stating its continued efforts to mitigate the impacts on the supply chain linked to its recently enhanced testing protocol for infant milk products.

    Influence of Stricter Regulations

    This new testing protocol was implemented in response to China’s tighter regulations for such products. The A2 Milk Company noted that this change is also leading to longer export clearance times at customs.

    The A2 Milk Company stated that these factors have developed quickly, and are still subject to uncertainty. This is especially true in relation to the unpredictability in freight and clearance assumptions, as well as potential additional indirect impacts that may flow from the Middle East conflict.

    Financial Outlook

    In the lead-up to its full-year results for fiscal 2026, following guidance released on February 16, the company now anticipates lower infant formula sales, increased supply chain costs, and a delay in fourth-quarter cash receipts into fiscal 2027. The company’s projected revenue, EBITDA, and net profit after tax (NPAT) are all expected to be less than previously forecasted.

    Questions & Answers

    What challenges is the A2 Milk Company currently experiencing?
    The A2 Milk Company is facing supply chain issues like the cost and availability of extra air freight required to expedite product shipments to China, which is being indirectly affected by the Middle East conflict. It’s also dealing with low inventory levels due to issues at its manufacturer, Synlait Milk.

    What changes have been implemented by Synlait Milk?
    Synlait Milk has introduced enhanced testing protocols for its infant milk products in an effort to comply with China’s stricter regulations for these products.

    What is the current financial outlook for the A2 Milk Company?
    The A2 Milk Company is expecting lower infant formula sales, increased supply chain costs, and a delay in fourth-quarter cash receipts into fiscal 2027. Predictions for revenue, EBITDA, and net profit after tax (NPAT) are all expected to be less than previously forecasted.

  • A2 Milk Settles Shareholder Dispute for $62M, Affirms No Impact on FY26 Earnings

    A2 Milk Settles Shareholder Dispute for $62M, Affirms No Impact on FY26 Earnings

    The A2 Milk Company has come to a preliminary agreement to conclude the prolonged shareholder class actions regarding its purportedly deceptive financial predictions.

    Settlement Details

    The globally traded dairy firm announced that the settlement amount is $62 million, encompassing interest and costs. This total amount will be covered by the available insurance proceeds and it will not affect the company’s fiscal 2026 earnings. In reaching this settlement, the company underlined that it does not acknowledge any wrongdoing. The resolution will undergo finalization and execution of a settlement deed, followed by the approval of the Supreme Court of Victoria.

    Class Action Proceedings

    Two separate class action proceedings were initiated against A2 Milk in October and November of 2021. These actions were brought forward on behalf of shareholders who held an interest in fully paid ordinary shares from August 19, 2020, to May 9, 2021. These actions pertained to the company’s disclosures and guidance for fiscal year 2021.

    In 2022, these separate class actions were merged into a single action.

    Allegations

    The claimants alleged that A2 Milk made misleading representations and failed to comply with its ongoing disclosure responsibilities as a public company, contravening Australian and New Zealand regulations.

    The preliminary agreement was hailed as a significant step in the proceedings. If approved, over 70% of the settlement sum will be distributed among group members. It was noted that the settlement represents a fair resolution and mitigates the delay and uncertainty of a protracted court trial.

    Questions & Answers

    What is the settlement amount that the A2 Milk Company has agreed to?
    The A2 Milk Company has agreed to a settlement amount of $62 million, which includes interest and costs.

    Who initiated the class action proceedings against the A2 Milk Company?
    The class action proceedings were initiated on behalf of shareholders who held an interest in fully paid ordinary shares of the company from August 19, 2020, to May 9, 2021.

    What were the allegations against the A2 Milk Company?
    The company was alleged to have made misleading representations and failed to comply with its ongoing disclosure obligations as a public company, in violation of Australian and New Zealand laws.

  • Major Shake-Up at A2 Milk: ANZ MD Steps Down, Sparks Leadership Reshuffle

    Major Shake-Up at A2 Milk: ANZ MD Steps Down, Sparks Leadership Reshuffle

    The A2 Milk Company has recently confirmed a sequence of significant leadership transitions, following the resignation of Eleanor Khor, the Managing Director (MD) for Australia and New Zealand (ANZ). Her tenure is set to conclude at the end of March.

    Leadership Change

    Jaron McVicar, currently serving as the Chief Legal and Sustainability Officer, will assume leadership of the ANZ business. The company expressed its gratitude towards Khor for her significant contributions during her service.

    Eleanor Khor has been an essential member of the company’s executive leadership team. Her significant contributions to the company’s growth and success over the past seven years were acknowledged by David Bortolussi, the MD and CEO of the company. Khor had been at the helm of the ANZ business unit since 2023 and was instrumental in enhancing brand health, fostering employee and customer engagement, and boosting sales and earnings. The company extends its best wishes to Khor for her future endeavors.

    Promotions and New Responsibilities

    Kate Tidbury, currently the head of legal in the group, is set to join the executive leadership team (ELT) in the capacity of Chief Legal Officer and Company Secretary.

    In Khor’s absence, the company’s Chief Financial Officer (CFO), David Muscat, will spearhead the corporate strategy. Furthermore, the Strategy and Analytics team in China will now report directly to Xiao Li, the regional CEO.

    Bortolussi has applauded Kate’s promotion to the ELT, citing her notable leadership and technical skills. He also commended Jaron, David, and Xiao for their new areas of responsibility, stating that these changes align well with the company’s carefully crafted internal succession plans.

    Questions & Answers

    Who is taking over the ANZ business of the A2 Milk Company following Eleanor Khor’s resignation?
    Jaron McVicar, the Chief Legal and Sustainability Officer, will take over the ANZ business following Eleanor Khor’s resignation.

    Who will head the corporate strategy in Eleanor Khor’s absence?
    In Eleanor Khor’s absence, the company’s Chief Financial Officer, David Muscat, will head the corporate strategy.

    Who will the Strategy and Analytics team in China report to in the future?
    The Strategy and Analytics team in China will now report directly to Xiao Li, the regional CEO.

  • A2 Milk Shares Suffer as China’s Plummeting Birth Rate Impacts Infant Formula Sales

    A2 Milk Shares Suffer as China’s Plummeting Birth Rate Impacts Infant Formula Sales

    New Zealand-based A2 Milk Company has reported a drop in its share price due to the decline in Chinese birth rates, which has reached a record low.

    On the Australian Securities Exchange (ASX), A2 shares plunged by 11.2 percent upon closing on Monday, January 19, shortly after the distressing news was announced in China. In response to a price query on the ASX, the company stated that it wasn’t privy to any information related to its current situation that hasn’t been disclosed to the market. This information, if known by certain market participants, might potentially explain the recent trading dynamics of its securities.

    A2’s Trading Performance Explanation

    When asked to provide an additional reason for its recent trading performance, A2 pointed to an announcement made by the China National Bureau of Statistics on January 19. The announcement revealed that the number of newborns in China last year had decreased by 17 percent to 7.92 million.

    The infant milk formula, one of A2’s greatest sources of income, is exported to China. In the fiscal year 2025, it recorded a revenue of NZ$1.2 billion (A$1.04 billion) from infant formula sales in China and Asia.

    Questions & Answers

    What caused the drop in A2 Milk Company’s share price?
    The decline in Chinese birth rates, which have reached a record low, was reported as the cause for the fall in A2’s share price.

    What was the percentage decrease in A2’s share price?
    A2’s share price dropped by 11.2 percent on the Australian Securities Exchange.

    What is one of A2’s largest sources of income?
    One of A2’s largest revenue streams is its infant milk formula, which is exported to China.

  • A2 Milk Amplifies China Connection: Targets Growth in English-Label Infant Formula Sales

    A2 Milk Amplifies China Connection: Targets Growth in English-Label Infant Formula Sales

    A2 Milk, a renowned dairy company, has expanded its enduring alliance with China State Farm Agribusiness Holding Shanghai Co (CSFA), with the inclusion of English-label (EL) infant formula within the cross-border e-commerce realm.

    Introducing A2 Genesis Product

    The initial focus of the rollout will be on the A2 Genesis product, a premium item in their line-up. Subsequently, other EL formulas, like A2 Platinum, will also be introduced to the market.

    New Agreement Enhances Distribution and Confidence

    In the newly ratified agreement, CSFA will now function as the sole import agent and principal distributor for EL products. This strategic move will allow A2 Milk to improve logistics, strengthen its retail footprint, and utilize the reputation of the state-owned enterprise to reinforce consumer confidence.

    Targeting the HMO Segment

    A2 Genesis was launched in the latter half of this year. This new product targets the rapidly expanding human-milk-oligosaccharide (HMO) sector, with a specific focus on gut health and immunity.

    David Bortolussi, CEO of A2 Milk, described this development as a pivotal component in the company’s China strategy. Meanwhile, Zhang Lei, Chairman of CSFA, portrayed this arrangement as a benchmark of successful collaboration in the dairy nutrition field.

    Expanded Agreement and Recent Acquisition

    The augmented agreement was officially established at the China International Import Expo in Shanghai, after a year of diligent preparation.

    Additionally, in September, A2 Milk successfully concluded its purchase of Yashili New Zealand’s Pokeno nutritional manufacturing facility for $282 million from China’s Mengniu Dairy Group.

    Questions & Answers

    What is the primary focus of A2 Milk’s initial rollout with CSFA?
    The primary focus of the initial rollout will be the premium A2 Genesis product, which targets the rapidly growing HMO sector, with an emphasis on gut health and immunity.

    What is the role of CSFA under the new agreement with A2 Milk?
    Under the new agreement, CSFA will function as the exclusive import agent and principal distributor for EL products, which will help A2 Milk streamline logistics, expand its retail presence, and build consumer confidence.

    What significant acquisition did A2 Milk make recently?
    In September, A2 Milk completed the acquisition of Yashili New Zealand’s Pokeno nutritional manufacturing facility for $282 million from China’s Mengniu Dairy Group.

  • A2 Milk Company Seals $282m Acquisition, Plans Rebranding And Expansion In China

    A2 Milk Company Seals $282m Acquisition, Plans Rebranding And Expansion In China

    New Zealand-based The A2 Milk Company has successfully finalized a $282 million acquisition of Yashili New Zealand’s Pokeno nutritional manufacturing facility. The deal was made with China’s Mengniu Dairy Group.

    Full Ownership and Future Plans

    With this acquisition, The A2 Milk Company now wholly owns the integrated plant. The facility was previously responsible for producing two China label infant milk formula products. Now under new ownership, the company plans to rebrand these products under the A2 Milk brand. This revamp is predicted to be completed within a year and a half, pending necessary regulatory approval.

    Financial Implications and Shareholder Value

    Pip Greenwood, the chairperson of The A2 Milk Company, shared that this purchase ensures greater certainty regarding the company’s capital needs. In addition to this, the acquisition will pave the way towards delivering increased value to the company’s shareholders. It is intended that this will be facilitated through a proposed special dividend of $300 million.

    Potential Expansion and Role in China

    Further benefits of owning the Pokeno facility include the potential for a third registration slot. Recognized as a significant producer of A2 Milk’s English label products, the facility is expected to play an essential role in the company’s expansion plans within the Chinese market.

    David Bortolussi, managing director and CEO, praised the Pokeno facility for its globally respected reputation. He highlighted its consistent production of high-quality infant milk formula, including their English label products, A2 Gentle Gold and A2 Genesis.

    Questions & Answers

    What is the scope of the acquisition of The A2 Milk Company?
    The A2 Milk Company has acquired full ownership of Yashili New Zealand’s Pokeno nutritional manufacturing facility in a $282 million deal with China’s Mengniu Dairy Group.

    What are the future plans for the products of the Pokeno facility?
    The company plans to rebrand the two China label infant milk formula products produced at the Pokeno facility under the A2 Milk brand, subject to regulatory approval.

    How will the acquisition contribute to shareholders’ value?
    The acquisition is expected to provide more certainty regarding the company’s capital needs. It will also potentially return value to shareholders through a planned special dividend of $300 million.

  • A2 Milk reports $1.6 bn in sales despite soft performance in China

    A2 Milk reports $1.6 bn in sales despite soft performance in China

    Specialty dairy company A2 Milk’s full-year profit is up by a third, driven by strong growth in its China section, despite challenging market conditions.

    Though it was expecting growth in the Chinese market to slow next year.

    Key numbers for the year ended June compared with a year ago:

    • net profit $155.6m vs $114.7m
    • revenue $1.59b vs $1.45b
    • underlying earnings $219m vs $196m
    • no dividend vs no dividend but a maximum $150m share buyback.

    Chief executive David Bortolussi said sales from the company’s China label infant milk formula (IMF) exceeded its sales in English-speaking countries for the first time, with the total sales for infant milk formula totaling more than $1.1 billion.

    “I’m proud of what our team has achieved this year, growing sales by 10 percent while the core China IMF market declined by 14 percent is a remarkable achievement,” he said.

    “The China IMF market has become increasingly challenging as a result of lower birth rates and increased competitive intensity.

    “Notwithstanding, we are well-positioned to continue to invest and grow share in FY24 to emerge in a stronger position when the market recovers.”

    Bortolussi said achieving reregistration of the company’s China label IMF product was critical to maintaining access to the company’s domestic market.

    Bortolussi expected to see a double-digit decline in the Chinese infant milk formula market in the 2024 financial year, but said the company expected to achieve “low single-digit group revenue growth”.

    “This is due to volume declines driven by the rolling impact of fewer newborns in recent years on later-stage IMF products, and a lower number of newborns expected in CY23 due to the lagged impact of Covid-19 prior to an expected increase in CY24,” he said.

    “The company will continue to execute its growth strategy in FY24, focusing on growing share in China IMF as well as commercialising opportunities in adjacent categories and new markets.”

    A2 expected to continue to gain market share in IMF, with growth dependent on the extent of market share gains in a declining market, he said.

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  • A2 Milk takes Care A2+ to court over a trademark dispute

    A2 Milk takes Care A2+ to court over a trademark dispute

    A2 Milk Company has taken legal action in the Federal Court against an Australian competitor, Care A2 Plus, and its associated companies for infringing its trademarks.

    In a filing, A2 Milk sought a permanent injunction restraining Care A2 Plus from selling or advertising its products with A2 Milk’s registered trademarks in Australia.

    “The A2 Milk Company protects its intellectual property rights, including trademarks. We will not be commenting further at this stage given the matter is before the court,” an A2 Milk spokesman told The Australian.

    The company lodged the case one week after A2 Milk’s lawyers sent a cease and desist letter to Care A2 Plus – which had already launched its own Federal Court action to “strike out” the trademarks concerned.

    A2 Milk has taken action against several other companies in Australia and abroad in the past to prevent them from using the term A2 in their brand names or marketing.

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  • A2 Milk profit halves on China slowdown but sees sales pick-up

    A2 Milk profit halves on China slowdown but sees sales pick-up

    New Zealand’s A2 Milk said on Monday its first-half profit halved as sales of its infant milk formula product continued to fall in China, but forecast second-half revenue to be significantly higher than a year ago.

    The firm reported a first-half net profit after tax of NZ$56.1 million ($37.54 million), down from NZ$120 million a year ago.

    The hit to its Chinese market stems from coronavirus-induced supply disruptions to its “daigou” channel, a reseller network where people outside China buy A2’s products and ship them to Chinese consumers informally.

    That, along with contracting market share in China owing to declining birth rates, has caused A2 Milk shares to plunge more than 60 percent from pre-Covid-19 levels, reportedly making it a target for Canadian dairy firm Saputo Inc.

    A2 said it expects sales of its Chinese label and English label infant milk formula products to pick up in the second half of the year, with inventory levels expected to improve, driving revenue growth.

    However, it said it does not expect this sales growth to translate into higher profit, as it plans to spend more on its expansion strategy and it is also battling rising costs.

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  • A2 Milk faces lawsuit over allegations of providing misleading forecasts

    A2 Milk faces lawsuit over allegations of providing misleading forecasts

    A2 Milk Co Ltd said on Wednesday Australian law firm Slater and Gordon has filed a class action lawsuit against the dairy firm on behalf of investors who bought its shares over a nine-month period when it issued multiple earnings downgrades.

    Shares of a2 Milk, which had plunged 62% during the nine-month period from August 2020 to May 2021, fell as much as 5.3% to NZ$6.450 following the news and were on track for their worst session in more than a month.

    The class action alleges that a2 Milk engaged in misleading or deceptive conduct in breach of the Corporations Act, and also breached continuous disclosure rules in posting four downgrades between September 2020 and May 2021, Slater and Gordon said in a statement.

    The downgrades came amid Australia’s souring ties with top trade partner China since 2018 and subsequent disruptions in the “daigou” channel, where Chinese shoppers buy products from outside China and resell it in the country. The channel accounts for a major portion of a2 Milk’s revenue.

    “There was a strong basis to allege that the company provided misleading guidance and was obliged to correct the market’s understanding of its financial position at a much earlier time,” Slater and Gordon Class Actions Practice Group Leader Kaitlin Ferris said.

    A2 Milk, which has lost nearly half its value since December, denied any liabilities and said it would “vigorously” defend the proceedings.

    The lawsuit, which was filed in the Supreme Court of Victoria, comes months after media reports concerning a potential class action by the law firm.

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  • A2 milk taking controlling stake in Mataura Valley Milk

    A2 milk taking controlling stake in Mataura Valley Milk

    A2 Milk’s NZ$270 million bid for New Zealand-based Mataura Valley Milk has been given the green light by the country’s Overseas Investment Office.

    The decision clears the way for a2 to pick up a 75 percent interest in the dairy nutrition business, which is now set to occur at the end of July.

    According to the business, the acquisition “provides the opportunity to participate in nutritional products manufacturing, provides supplier and geographic diversification, and strengthens our relationship with key partners in China.”

    “As previously announced, due to the increasing scale of our infant nutrition business, we have been assessing participation in manufacturing capacity and capability,” said A2 Milk Company CEO Geoff Babidge said last year.

    “Our intention would be to invest further to establish blending and canning capacity at Mataura’s facility to support the establishment of a fully integrated manufacturing plant for infant nutrition.”

    A key part of the investment is that Mataura Valley Milk’s current majority shareholder, China Animal Husbandry Group, will retain its 25 percent interest in the business alongside a2’s 75 percent interest.

    China Animal Husbandry Group is the parent company to a2’s strategic logistics and distribution partner in China, CSFA Holdings Shanghai, allowing closer cooperation between the two firms.

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