A2 agrees distribution package for Western Australia

A2 Corporation Limited (NZX:ATM.NZ - News) has appointed Western Australia’s most experienced dairy company, Brownes Food Operations Pty Limited, to package a range of a2 brand fresh milk products to meet the rising demand from Western Australian consumers.

Brownes Perth-based processing plant will begin producing a2 fresh milk products in November 2013 from locally sourced a2 dairy herds.

A2 Corporation (A2C) Chief Executive Officer Geoffrey Babidge says a number of options have been considered to efficiently supply Western Australian consumers who have discovered the digestive ease of a2 fresh milk products.

"This is a strategic medium term supply agreement that will deliver Western Australians the high quality a2 fresh milk direct from West Australian farms. Brownes fully supports the a2 proposition and is well positioned to meet the expected increase in consumer demand."

Sales of a2 fresh milk products in Australia increased by 48 per cent in the 12 months to 30 June 2013 to become the fastest growing dairy brand and one of the top 20 branded items in the entire supermarket channel. a2 fresh milk is estimated to have more than 7.4 per cent market share by value of fresh milk sales in supermarkets in Australia.

A2C’s own processing facility at Smeaton Grange in south-west Sydney will continue to supply a2 fresh milk products to Western Australia until Brownes begin packaging in November.

"A2C expects that the surplus capacity created from this move at Smeaton Grange will be absorbed over subsequent months by the increasing consumer demand for a2 fresh milk in New South Wales. There will also be efficiencies from lower transport costs in servicing Western Australia and benefits from an increased product supply there," Mr Babidge says.