Eight years after its initial scientific breakthrough, A2 Corporation has begun selling “risk-free” cow’s milk on the New Zealand market. Demand is strong. Amidst protest from producers of conventional ‘A1’ milk, such as mega-dairy Fonterra, the NZFSA is currently conducting a literature review to ascertain the benefits or otherwise of milk. Penny Smith reports.
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On Monday 28 April, complete with feisty instore leaflets that in the author’s usual shopping haunt were removed because permission for them apparently hadn’t been signed off, Auckland-based Biotech company A2 Corporation began selling its “risk free” milk. The company’s claim is that it offers consumers a “safe” alternative to standard (A1) milk.
Initial newspaper advertising for the product during launch week was considerably more temperate – but behind it was a recent history of claims, counter-claims and full-on litigation centring around claims that the beta-casein A1 found in standard milk has been strongly linked to heart disease, type 1 (childhood) diabetes and other illnesses.
According to material issued by A2, cows naturally produce milk with both A1 or A2 beta-casein proteins. In New Zealand, the corporation estimates that 20-45% of dairy cows produce milk with the A2 protein. The rest produce milk with either the more common A1 protein or a mixture of the two.
A2 Corporation says it has developed a simple and cost-effective DNA test, using a hair plucked from the cow’s tail, which identifies whether a cow carries A2 beta-casein proteins. The company has used this discovery, now patented, to develop herds which produce milk with only A2 proteins. The result, in a market that is dominated by dairy giant Fonterra, has been turbulent times for a normally soothing daily staple.
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By GlobalDataStrong demand for A2 milk in Australia
“The launch in New Zealand is important for A2 Corporation as we are now able to offer consumers A2 milk which is free of the health risks associated with beta-casein A1,” says Dr Corran McLachlan, founder and CEO of A2 Corporation. A2 Corporation has been selling milk in Australia, under the “Jersey Gold” brand, since early March. Demand has reportedly been strong.
Although some of A2’s claims about its product remain unsubstantiated – research studies funded by the corporation to date have been inconclusive – Dr McLachlan now says that a study on rabbits, carried out earlier this year by Professor Julie Campbell at the Wesley Research Institute in Brisbane “demonstrates for the first time a direct link between the consumption of beta casein A1 and heart disease in an animal.”
The A2 product hits the market a full eight years after the company made its initial tail-pulling scientific breakthrough. “We thought we’d have it on the market by the end of 1996,” McLachlan says, but Fonterra, which controls 95% of New Zealand’s milk supply, had made it, he says, a struggle to get A2 milk on to the market. Fonterra used an “anti-competitive clause” in the Dairy Industry Restructuring Act 2001 to delay farmers from supplying A2 Corporation licensees with A2 milk.
Fonterra denies negative effects of A1 milk
In turn, A2 Corporation started High Court proceedings in November last year alleging that Fonterra was violating the Fair Trading Act by failing to disclose information about possible links between A1 milk and diabetes, heart disease, autism and schizophrenia.
Fonterra continues to strongly dispute the claims that A1 milk has health defects. Fonterra’s Chief Technology Officer, Dr Chris Mallet, says there is no valid scientific evidence currently available to Fonterra, published or otherwise, that A1 beta-casein causes such effects.
“Fonterra believes A2 Corporation’s claims are irresponsible because they may result in people removing normal milk from their diet to the detriment of their overall health and well-being.” Dr Mallet says. Fonterra would not comment on the claims it had hampered development of the product.
Meanwhile, the New Zealand Food Safety Authority has called in former New Zealand Heart Foundation Medical Director Boyd Swinburn to undertake a literature review on research surrounding the A1/A2 debate.
NZFSA calling in the experts
“We have not found any evidence to date that would make us change our position on milk this far, which is that milk is nutritious and beneficial and should remain part of a balanced diet,” says NZFSA’s Director of Policy and Regulatory Standards, Carole Inkster. “But at this stage we believe a responsible step would be to get the research reviewed by an expert. We are pleased Professor Swinburn has agreed to do this for us,” she says.
The first A2 milk on the New Zealand market is being supplied by Waikato-based milk processor Ridge Group for the North Island and International Dairy Ventures in the South Island. Farmers supplying milk to A2 Corporation licensees have either terminated their Fonterra supply contracts or have established completely new herds. A2 is reportedly being backed by Dunedin entrepreneur Howard Paterson, often described as the richest man in the South Island.
A pre-launch consumer survey done for A2 Corporation by Colmar Brunton showed that consumers were willing to pay a premium for the perceived health benefits of A2 milk, and would even shop at different supermarkets to obtain it.
A2 milk is currently being sold through selected Progressive Enterprises supermarkets (Woolworths, Foodtown and Countdown) in Auckland, Christchurch and Dunedin. It sells at 10 to 15c (US$0.06-0.09) a litre higher than regular milk.
At the launch of the product at Foodtown Greenlane, Progressive Enterprises Chief Ted Van Arkel said the chain wanted to be the first to put A2 milk on the domestic market, but it would not enter into any controversy over the health benefit claims of A2 versus A1 milk.
In Auckland, A2 milk is available in Woolworths New Lynn, and at Foodtown Greenlane, Brown’s Bay and Meadowlands. All four supermarkets report that demand has been strong. Brown’s Bay Foodtown had already sold out of its first delivery (16 crates’ worth) less than four days after the milk’s release.
A2’s present plans are to launch the milk in the US and Britain within the next 12 months.
As GR went to press, Fonterra had made a further claim to the NZFSA & Commerce Commission about A2’s product labelling.
This article first appeared in GR magazine New Zealand.
