Howard, I don't think we should be concerned that China intend...

Howard, I don't think we should be concerned that China intend to limit each supplier to three brands, that's more an issue for Synlait than it is for A2M.

Synlait will undoubtedly elect to drop one of their four Chinese focused brands voluntarily rather than allow the Chinese govt to choose for them, and there is no way Synlait will drop a2.

The elephant in the room, as you call it, is not the ‘three brand’ regulation, or the new grey market tax, or even the intended 80% reduction in brands allowed within mainland China.

The elephant in the room is the Chinese regulations banning non Chinese labels on infant formula tins, and, the extent to which the Chinese govt will enforce that regulation.

English labelled product is presently flooding in from Australia via the grey market.

The risk over the coming months for A2M is that the Chinese govt successfully lobby the Australia govt to further restrict the daigou trade just as New Zealand and Hong Kong have.

I think we are starting to see that as a staged process with the Aussie govt presently stepping up their crack down on illegal bulk daigou shipments.

When they have that under better control they may well tighten further, and perhaps over time implement the same restrictions as New Zealand have.