Actually, A2M is studied in business schools for their brilliant marketing. FACT
I can 100% guarantee you they have not paid millions upon millions for consultants and market surveys to then put out a price increase that will not be accepted by the market. At the end of the day, A2 Platinum is an aspirational brand, not for the masses (just yet).
All premium brands will rather spend money on marketing and then maintain or increase margin and minimise discounting to be consistent with their premium branding. They should be one of the most expensive IF's out there in order to do this. Remember, their main market is China where they sell the product at much higher prices than Australia. So there needs to be some consistency across these different channels where they are probably giving away too much margin to local diagou. Yes, we know how badly this strategy backfired for Bellamys, but we also know how completely clueless that previous management were. So I have no concerns on that front. They are the perfect case study of how to PO the diagou.
I was also suprised to read from one of the news reports yesterday that their seems to be some supply issues of fresh milk as reported by customers. It wasn't clear if that was due to stores restocking in timely manner or something else. But I think many missed the 12% increase of fresh milk sales in Australia which is a very mature market. That's the power of the marketing spend which will then lead to many customers looking to buy the higher margin nutritional products down the track.
A2M Price at posting:
$13.37 Sentiment: Buy Disclosure: Held
(20min delay)