Fonterra phases out A2 milk range, introduces lactose free

Fonterra's Anchor has phased out A2 milk from its range.

Fonterra’s Anchor has phased out its A2 milk range in New Zealand after deciding not to renew its licence agreement with The a2 Milk Company.

The co-op said it was seeking to sharpen its focus on lactose-free dairy, which it said was now the country’s fastest-growing segment after protein.

“This is a strategic shift by the co-op’s Oceania consumer business and follows the double-digit growth of Anchor Zero Lacto 1-litre Fresh, prompting the expansion of Anchor’s Zero Lacto portfolio into 2-litre fresh and 1-litre UHT formats,” it said.

While Anchor A2 Milk is no longer available, consumers continue to have access to other fresh milk that is A1 protein-free from other companies, Fonterra said.

Last week, Fonterra’s farmers voted in favour of selling its consumer businesses, which include the Anchor brand, to Lactalis.

The decision to phase out A2 milk was not related to the asset sale.

In 2018, Fonterra and NZX-listed firm The a2 Milk Company entered into a strategic relationship that linked Fonterra’s milk pool and supply chain, manufacturing capability and in-market sales and distribution capacity with a2 Milk’s brand.

A2 milk comes from cows specially selected to naturally produce milk with only the A2-type protein, which The a2 Milk Company claims can help people who have trouble digesting standard milk, which has both the A1 and A2 beta proteins.

A2 milk in an Anchor bottle became unavailable in the New Zealand market on July 28 due to Fonterra’s decision not to renew its licence agreement.

The a2 Milk Company said it is working through its options to restore the availability of a2 Milk-branded fresh milk in New Zealand.

In the meantime, The a2 Milk Company’s Full Cream UHT 200ml is available in Costco, it said. Its other lines of a2 milk powder, full cream and skim were available in selected Chemist Warehouse stores and online, it said.

“We are disappointed a2 Milk is not currently available in New Zealand,” The a2 Milk Company said.

“We are in discussions with a new licence partner and look forward to providing an update soon,” managing director and chief executive officer, David Bortolussi, said.

The a2 Milk Company said the contribution of a2 Milk fresh milk in New Zealand to its financial results was “immaterial”.

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