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A2 sues Australia's ABC over 'bogus' claims

A2's Australian subsidiary has lodged actions in the Federal Court in Sydney.

Suze Metherell
Thu, 11 Jun 2015

A2 Milk Co [NZX: ATM], the dual-listed milk marketing company, is suing the Australian Broadcasting Corporation alleging misleading and deceptive statements in advertising its consumer affairs programme, The Checkout.

A2's Australian subsidiary has lodged actions in the Federal Court in Sydney, using prominent Australian barrister Allan Myers QC, after the public broadcaster promoted a segment that called the company's scientific claims "bogus." A2 Milk claims this was a breach of the Competition and Consumer Act.

A2 Milk markets its products as potentially being beneficial for people who suffer intolerance to the naturally occurring A1 protein in milk, including bloating and stomach pain. A2 has captured some 9.3% of the Australian fresh milk market by selling milk that only has A2 protein.

The consumer affairs programme, which is externally produced by production company Giant Dwarf, aired a segment on April 30, which called the company's claims "bullshit" while a lactose-intolerant presenter 'skolled' a bottle of the milk and then pretended to vomit off-screen. A2 Milk claims the programme's actual segment itself was in breach of the ABC's code of conduct. Giant Dwarf is known in Australia for its satirical and political shows.

"I was astonished that ABC could allow one of its externally produced programmes to be advertised in a misleading and deceptive manner," A2 Milk chief executive Peter Nathan said in a statement. He was "at a loss as to why a major taxpayer-funded organisation such as the ABC singled out a fast-growing Australian listed dairy company as a target."

In an emailed statement to BusinessDesk, an ABC spokesman rejected the claims.

"Yesterday afternoon the ABC received notification of legal action by A2 Milk Company but previously responded to a letter from lawyers acting on their behalf," he said. "We strongly rejected the suggestion that the matters A2 has complained about involved misleading or deceptive conduct."

Competition in Australia's dairy market saw milk processor Lion last year change the labelling on its Pura and Dairy Farmers milk to include a reference to the A2 protein, while rival dairy company Parmalat reportedly hired a consultant to help it try to discredit the health claims. A2 Milk's Mr Nathan pointed to the competitive market as a possible reason behind The Checkout's segment.

"Given recent attacks on the A2 Milk Company (Australia) by our multinational competitors, Lion and Parmalat, I have to wonder if there isn't someone behind the scene trying to drive The Checkout agenda here and the ABC has unwittingly become the conduit to a bigger endgame," Mr Nathan said.

Mr Nathan told BusinessDesk that A2 Milk remains a New Zealand-based company, although most of its sales come from across the Tasman. He said "the evidence is very strong and it is important that the science is not misrepresented" and expected further research on the milk protein to be published in the coming 12 months.

Last August, the first clinical trial of A1 and A2 milk proteins on human digestion, funded by A2 Milk and conducted by Curtin University, found that the A1 beta-casein led to a "looser" stool consistency with the effect particularly strong for women. Researchers at the university carried out an eight-week double-blind study of 41 people, who were fed A1 or A2 milk and then tested their stool samples and recorded symptoms such as "bloating, abdominal pain, flatus and difficulty in voiding." The study found there were differences.

The executive producer of The Checkout Julian Morrow told the Sydney Morning Herald that news of the legal hearing gave him "a feeling of discomfort in my tummy, and I can't say if drinking A2 Milk would help with that at all."


Suze Metherell
Thu, 11 Jun 2015
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A2 sues Australia's ABC over 'bogus' claims