ATM - A2 Milk Corporation Limited

[skid]

Here we go, a2 milk now available within the first 10 Whole Foods stores in California.

http://a2milk.com/find/

First of many I suppose, on their way to getting to circa 70% distribution in Southern California by the end of July, still reckon that’s quite a remarkable objective a2MC have set.

well its a start,but as we all know ,Its the supermarkets is where the $$ is--Gotta start somewhere though----(there really does have to be big numbers for food items to make it)--still waiting for some book to come out by some health Guru raving about A2

[babymonster]

quite a few sub holders reducing their holding... wonder why...anyone has any suggestion?

[skid]

No mystery Ziggy. If the attainable end goal remains the same, but the company has to spend twice as much money to get there as they thought, then the value of the company halves. That is how company valuation works. ATM is actually more expensive now at 52c than it was at 92c, when it was assumed all markets would roll over according to the Australian market roll out plan.

SNOOPY

Well that post certainly challenges the ''Half price bargain of the century'' viewpoint---Interesting debates around this share

[sb9]

Sure was big turnover day today with nice lift in sp....

[NT001]

This piece by Keith Woodford would appear to suggest the golden days are over for infant formula in China.

https://keithwoodford.wordpress.com/...ola/#more-1275

It is unclear whether a2MC has any inside running in what Synlait and New Hope are doing. Probably not, despite its close working relationship with Synlait. Whatever, it's not necessarily bad news for a2MC. A lot of the trashy speculators will now be squeezed out of the China market, enabling consumers to focus on just a few select brands. It will also allow them to more easily understand the unique digestive/health benefits of A2 milk, which should appeal particularly to Chinese, who are more susceptible than westerners to the downside of becoming dairy consumers.

This market upheaval also confirms that perceptions of a2MC's future being firmly based on the China market are incorrect. There has to be a broader strategy, with a lot of focus on the smaller but more mature US and UK markets, plus extensions into continental Europe and SE Asia - and that is exactly what the company has already signalled.

An interesting aspect that Woodford has not alluded to here is that Synlait's Chinese partner New Hope, the prime mover in this market transformation, is now firmly tied up with Freedom Foods and the Perich-Moxey dairying consortium in Australia. Freedom owns 17% of a2MC and the Perich herds have been providing a significant part of the A2 milk being shipped to China. Just recently, the Perich group. which controls Freedom Foods, ceased to have seats on the a2MC board representing Freedom, and it will be interesting to see whether Freedom and Perich remain friends of a2MC or a split opens up and they become rivals in the China market. All the more reason to not have too many eggs in the China basket.

[MAC]

Yep, the best is the best when it's the closest infant formula to a2 human milk, and one might think that could be all important to all mums, notably though perhaps in particular to a doted one child policy prodigy.

[Harrie]

Interesting stuff NT. I guess the question is what sort of contractual relationship is there between a2mc and SNL in terms of processing a2 milk formula. Is there a renewable contract, could SNL cancel the contract legally? A lot of questions around that.

On the other hand SNL could use new hope to help distribute a2 baby formula. That would be a win/win for both companies. The question then is around a2mc margin. While that may drop it may be substituted for greater sales opportunity if marketed correctly.

This then leads on to why freedom foods would not want to also open up their own distribution channels to a2mc. You may wonder why would they do that for a 17% share of a2's profit when they can sell their own non a2 milk for 100% share of their own profit, but a2mc is bigger than the Chinese market and 17% of total profit in a2mc may be worth more than what they could lose in profit by promoting a2 milk in China along with their own milk. Possible that Freedom could cut a2mc out from their China distribution network and still maintain their shareholding in a2mc.

Interesting times

[MAC]

Honestly didn't know that they sold a2 milk powder like that, or perhaps it's the next product yet to launch. Interesting job's some folk have ?

[mayday]

Here it goes, hmmm don't really care about their packaging story yet good to know A2 on its track

http://www.packworld.com/package-typ...es-credentials

[NT001]

Interesting stuff NT. I guess the question is what sort of contractual relationship is there between a2mc and SNL in terms of processing a2 milk formula. Is there a renewable contract, could SNL cancel the contract legally? A lot of questions around that.

I think an even more important question could arise over a2MC's formula import arrangements into China. Late last year a2MC announced an agreement to appoint China State Farm Holdings Shanghai (CSF) as its exclusive import agent for a2Platinum infant formula into mainland China. CSF now provides government relations advice and support while a2MC has assumed responsibility for distribution of infant formula products within the market and will progressively establish new distribution arrangements. a2MC will continue to oversee the marketing and communication activities for the brand.

I have always felt it dangerous for a2MC to give one company absolute exclusivity on any part of its operations, because if that company decides (for whatever reason) to become a less than enthusiastic partner it can effectively shut down a2MC's commercial operation. This has happened before. We don't know, for example, whether there is any tie-up betweem CSF and New Hope. Maybe I'm too suspicious, but in dealing with China I always look for the trap.