Thanks for that KW. I wasn't aware of that English milk price war pre 2011. I think though that my previous message was not clear.
My issue is that the milk price war in Australia, where home brand prices effectively halved in Australia, has reduced the value of the entire retail fresh milk market significantly - by around 30%. This in itself is nothing to do with ATM, which has continued to grow its own A2 volumes at high value, albeit from a low base if we go back to 2009. The issue here is that A2 started its push into Australia before the Coles-Woolies price war started in January 2011, and has continued to push onwards and upwards as the Coles-Woolies price war continues. At one level this Coles -Woolies price war is irrelevent to ATM, because A2 milk itself is not part of this price war. But ATM have made it relevent by quoting their sales in terms of market share by value. My point is that the market by value has changed significantly during the period that ATM was ramping up its Australian sales.
If there had been no Coles-Woolies price war, then A2 volumes would probably be as they are now, ATM profitability would be as it is now, but ATM market share by value would be less, because the whole comparative market would be larger in dollar terms. The overall market by value would not have shrunk without a prolonged retail market discounted milk price. It is the fundamental shrinking in overall fresh milk market value, during the period when A2 sales are ramping up, that has caused the distortionately high market value share quoted by A2. This isn't a problem, unless you use this same value growth path in other markets where there has not been the same market distortion by value that occurred in Australia.
Britain may have had a supermarket price war in milk. But because it occurred before A2 milk marketing started in earnest, it is not relevent to the projected ATM market growth by value in the UK (unless a new milk price war at a lower level starts!). To get an estimate on the timeline of what the market penetration by value will be in the UK going forwards, with the Australian market experience behind us, is a useful exercise. I contend that for comparative purposes, you have to imagine what would have happened to the market share by value if the Coles-Woolies price war did not happen as A2 was being established in Australia. Only then will you get a realistic predictor of what the market growth by value might be as the UK market develops.
SNOOPY