A2 formula deal extended
Synlait and the A2 Milk Company have extended their infant formula supply agreement in a further sign of increasing demand for the specialist milk category.
The supply agreement for A2 Platinum infant formula and other nutritional products to supply the China, Australia and New Zealand markets was extended to 2023.
While the agreement increased volumes, a Synlait spokesman declined to disclose figures for commercial reasons. More capacity would be allocated at its Dunsandel plant in Central Canterbury for the product. Synlait had sufficient A2 milk volume from its dairy farmer suppliers to meet its requirements.
In February, dairy giant
Fonterra, which had previously dismissed the A2 milk market, also entered an arrangement with the A2
Milk Company to supply fresh milk in New Zealand and
Australia, as well as branded butter and cheese and nutritional milk powder products.
People who have digestive discomfort when drinking ordinary cows’ milk find A2 milk easier on digestion. That’s because A2 milk contains only the A2 protein and no A1, commonly found in cows. As production of A1 or A2 milk depends on a cow’s genetics, farmers can breed an A2 herd, but it can take at least seven years. Farmers with multiple herds can identify individual A2 cows to run a separate herd.
Synlait managing director John Penno said the success of A2 Platinum had exceeded all expectations over the past two years. ‘‘This step is about bringing Synlait and A2 Milk Company closer together in anticipation of continued growth. It also puts both companies in a great position to further leverage the Chinese Food and Drug Agency (CFDA) registration of A2’s infant formula products, which was achieved in September 2017.’’
New Zealand’s largest supplier of artificial breeding services, LIC, was ready for any increase in demand for A2 genetics, said chief executive Wayne McNee. Many farmers were actually already breeding towards A2, but genotype testing can provide the key to achieving a full A2 status much faster.