A2 Milk chief Geoffrey Babidge unfazed by rival Nestle’s launch in China
Samantha Bailey12:00AM April 4, 2018
A2 Milk chief executive Geoffrey Babidge says his dairy company won’t be hurt by Nestle’s launch of its own a2 infant formula in China, but that instead, A2 Milk stands to benefit from it.
“We’ve got a very significant global company in the form of Nestle putting their toe in the water,” Mr Babidge told The Australian.
“That represents a very strong endorsement of the a1 protein free proposition, which in our view, will create more interest and, in fact, build the category; and we’re positive about that.”
In February, A2 booked a first-half net profit after tax of $NZ98.5 million ($92.82m), more than double the previous corresponding period, on the back of strong demand for its infant formula in China.
A2 Milk sells dairy products, including infant formula that only contain the a2 protein, claiming it can be consumed by those who struggle to digest normal milk. “We are uniquely positioned around the a1 protein free story, that’s all we’re involved in,” Mr Babidge said. “This contrasts very significantly with other likely new entrants who no doubt likely have an existing portfolio of products that incorporate both the a1 protein as well as the a2. And how they position themselves and their brands to compete ... will be a challenge for them moving forward.”
A2 Milk’s share price fell more than 12 per cent last week on the news of Nestle’s product launch. Yesterday, it closed up 1.22 per cent at $11.60, against a flat benchmark index.
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