ATM - A2 Milk Corporation Limited

[stoploss]

I'm also beginning to wonder how much of the supply shortage is being engineered by the companies themselves. If I were running the company, I'd make sure that the majority of my product was shipped directly to and sold in China, at a higher price than I get in Australia. I would maintain only enough stock in Australia to (a) keep my main distributors happy so that they keep it on the shelves (Coles/Woolies) and (b) to maintain the truth that it is a brand sold in Australia and used by Australians, so the Chinese will buy it in China, and (c) to deliberately create a shortage so that people start to wonder why my product is so bloody special that its always sold out, thus prompting them to try it (no-one is complaining they cant get hold of S26!).

One solution to the problem is for prices in Australia to be put up. Then the Chinese can buy in China and the Australians can buy in Australia. Its only the price differential that is driving the black market. But then everyone would whinge that the prices are too high and they can't afford it. Basically infant formula manufacturers are currently subsidising their local market at the expense of shareholders by offering low prices to consumers. In any normal market an increase in demand and no corresponding increase in supply results in price rises.

Hope they don't do this with the A2 powder ....

http://www.nzherald.co.nz/business/n...ectid=11544519

[iceman]

The offer document states "6.3 If a2MC receives valid applications in excess of NZ$3,000,000, it will scale back all applicationson a proportionate basis..."

Can anyone clarify what this means in plain English? What is it proportionate to? The amount of shares applies for (so all those that apply for $15k will get the same scaling % applies as those who apply for $5k), or is it proportionate to your existing shareholding, so larger holders get more?

I assume the first, but the wording is not clear.

The way I have read the documents is that there is no guaranteed minimum and all applications will be scaled back proportionally. If for example A2M received applications for $15M, then everyone would get 20% of what they applied for, adding up to $3M.
Personally I expect much greater scaling than that

[stoploss]

See that is the interesting thing. Being cheaper doesnt mean being successful. In Australia, the brands that are selling out are the three premium ones - A2, Bellamys and Aptamil. No-one appears to be clearing out the supermarkets and bulk exporting S26 or NAN to China. The Chinese like premium priced products - they associate that with both quality and status. Being a cheap infant formula made by a Chinese company in NZ is not going to have the same cache as the stuff that Australian consumers are now clamouring for in the news. If anything, this is going to drive more Chinese purchasers because the media are promoting it as rare and special. Its become the Louis Vuitton of infant formula LOL

Don't Synlait make the A2 powder KW ?

[mayday]

Interesting divergence for A2 on the markets today - NZ opened lower, Australia opened higher.

My entire ASX watchlist is in red now apart from A2M and BAL, luckily not too many shorts onto both stocks I suppose

[Joshuatree]

A bit rugged alright; 15% of my ASX stocks held are up 31% flat and 54% down atp.

[NT001]

....As I am sure you know... medical evidence of adverse health effects in the general population from drinking milk containing A1 does not exist.

You must be joking. That's the kind of statement you only hear nowadays from spokespeople for Fonterra or Dairy Australia or the discredited former NZ Food Safety Authority, ie people still trying to protect a stance that has been well and truly disproved by clinical research over the past decade. Unless perhaps you are trying to be very cute with your use of words. Of course the adverse health effects for which evidence has been accumulating from the work of teams around the world do not affect each individual member of the "general population" to the same degree, because each individual's susceptibility to harm is modulated in some degree by specific personal circumstamces, whether they be genetic, environmental, medical, immunological, lifestyle, dietary, fitness-related or plain bad luck etc. Some will be lucky. Others may be the victims of a combination of factors. But all members of the "general population" are at risk if they consume A1 milk, and the evidence is now so strong that you won't find knowledgable scientists seriously disputing this any more.

Some may quibble a bit around the edges, but no one - not even the most powerfully equipped dairy interests like Fonterra - any longer disputes that BCM7, the opioid peptide generated through the digestion of A1 milk, can pass through the gut wall of a significant proportion of consumers, and can get into the bloodstream and from there into the brain where it can contribute to a number of unpleasant conditions such as autism and schizophrenia. Nor do they dispute that BCM7 is demonstrably capable of causing inflamation in various parts of the body, a precursor to such diseases as heart disease, diabetes, cancer etc. Nor have they come up with any credible alternative explanation as to why there is an incontrovertible statistical correlation between the high incidence of heart disease and type 1 diabetes in countries where the milk contains a high proportion of A1. (Fonterra still co-holds a patent based on a probable link between A1 milk and diabetes)

A few years ago, people like the European Food Safety Authority were able to say some of these things could be disregarded as they had yet to be proven. They can't now. Their concern is that people may get switched off drinking milk, and at present they still think the possible risks outweigh the proven benefits, so they're not updating their views in line with ty he new research. But why take the risk if it's undeniable and avoidable? A2 milk gives consumers the opportunity to avoid it

In many branches of the research, it has now been shown clinically that there is definite evidence if not absolute proof of links between BCM7 and harmful medical conditions, and that there is a known pathway by which causation could occur. Some critics still argue that such evidence does not prove BCM7 is actually causing medical harm. They want "proof" that it's happening, not just evidence, or even proof that it CAN happen. It's the old story. Remember decades ago when the tobacco lobby said "yes the statistics do seem to support a suspectedl link between smoking and lung cancer, and the medical experts have shown the link could theoretically be causative, but no one has ever actually produced a case where a smoker got lung cancer and all other causes were able to be 100% excluded." Yeah, right.

DYOR. For a start, read Keith Woodford's book "Devil in the Milk", second edition updated. That should be everyone's starting point. Then read the books and scientific papers that show where he's wrong. There aren't any, which should make you think. And if all that doesn't convince you, read the websites that outline the scores of peer-reviewed research papers on the subject of BCM7.

[CatO'Tonic]

You must be joking. That's the kind of statement you only hear nowadays from spokespeople for Fonterra or Dairy Australia or the discredited former NZ Food Safety Authority, ie people still trying to protect a stance that has been well and truly disproved by clinical research over the past decade. Unless perhaps you are trying to be very cute with your use of words. Of course the adverse health effects for which evidence has been accumulating from the work of teams around the world do not affect each individual member of the "general population" to the same degree, because each individual's susceptibility to harm is modulated in some degree by specific personal circumstamces, whether they be genetic, environmental, medical, immunological, lifestyle, dietary, fitness-related or plain bad luck etc. Some will be lucky. Others may be the victims of a combination of factors. But all members of the "general population" are at risk if they consume A1 milk, and the evidence is now so strong that you won't find knowledgable scientists seriously disputing this any more.

Some may quibble a bit around the edges, but no one - not even the most powerfully equipped dairy interests like Fonterra - any longer disputes that BCM7, the opioid peptide generated through the digestion of A1 milk, can pass through the gut wall of a significant proportion of consumers, and can get into the bloodstream and from there into the brain where it can contribute to a number of unpleasant conditions such as autism and schizophrenia. Nor do they dispute that BCM7 is demonstrably capable of causing inflamation in various parts of the body, a precursor to such diseases as heart disease, diabetes, cancer etc. Nor have they come up with any credible alternative explanation as to why there is an incontrovertible statistical correlation between the high incidence of heart disease and type 1 diabetes in countries where the milk contains a high proportion of A1. (Fonterra still co-holds a patent based on a probable link between A1 milk and diabetes)

A few years ago, people like the European Food Safety Authority were able to say some of these things could be disregarded as they had yet to be proven. They can't now. Their concern is that people may get switched off drinking milk, and at present they still think the possible risks outweigh the proven benefits, so they're not updating their views in line with ty he new research. But why take the risk if it's undeniable and avoidable? A2 milk gives consumers the opportunity to avoid it

In many branches of the research, it has now been shown clinically that there is definite evidence if not absolute proof of links between BCM7 and harmful medical conditions, and that there is a known pathway by which causation could occur. Some critics still argue that such evidence does not prove BCM7 is actually causing medical harm. They want "proof" that it's happening, not just evidence, or even proof that it CAN happen. It's the old story. Remember decades ago when the tobacco lobby said "yes the statistics do seem to support a suspectedl link between smoking and lung cancer, and the medical experts have shown the link could theoretically be causative, but no one has ever actually produced a case where a smoker got lung cancer and all other causes were able to be 100% excluded." Yeah, right.

DYOR. For a start, read Keith Woodford's book "Devil in the Milk", second edition updated. That should be everyone's starting point. Then read the books and scientific papers that show where he's wrong. There aren't any, which should make you think. And if all that doesn't convince you, read the websites that outline the scores of peer-reviewed research papers on the subject of BCM7.

Agree NT001, its unlikely that a2 or its supporters will be able to prove their case conclusively and trying to do so would be a waste of time and money. I know personally that I get a crook guts when I drink ordinary milk and both of my kids get fidgety and restless with it, biting fingernails, chewing clothes etc... All anecdotal I know, but try convincing me that there's nothing in it. I like to think that good science will eventually win the day. Like the smoking and global warming debates, doubters will get quieter as the weight of research starts to erode their position. Eventually, anyone looking at the argument will follow the money - who stands to gain/lose the most. There are far too many vested interests who are quite happy with the status quo and not at all interested in supporting research into the whole A1/A2 thing. Read into that what you will. The fact that the main stream NZ milk industry hasn't backed this is neither here nor there. Remember Fonterra are the same outfit that have decided it is a good idea to export a raw commodity into a global market they don't control. Also, their response to the a1/a2 debate so far has been entirely reactionary. After initial attempts to acquire the IP behind A2 milk,they have had no official opinion on the matter, probably hoping it will all just go away.
I'd like to see the a2 message out there so people can at least make an informed decision. Disc: I had quite a few of these for a while but no longer holding as this one is still a bit too speculative for my nerves. I'll be up to my neck in this company if/when they get serious traction in the states (although they'll almost certainly be acquired before then).

[sb9]

I'm picking the sp might hit $1 mark tomorrow on back of buoyant trading update and other things set to announce at ASM.

[see weed]

I'm picking the sp might hit $1 mark tomorrow on back of buoyant trading update and other things set to announce at ASM.

Funny how things can change in a year. Last year the sp dropped from about 65c to 50c after the meeting, which was good for me.

[sb9]

$1 here it comes...

From ASM presentation:

Big revised earnings!

From EBITDA NZ$12m to NZ$22m! If excluding UK&US of loss (NZ$16.5m), will be NZ$38.5m!

Also, it's great news that UK operation to achieve break-even by first half FY17.