A2 Milk says supply chain issues resolved after China infant formula shortfall
A2 Milk has confirmed that supply chain issues materially affected the infant formula exporter during its fourth quarter but said product availability issues had now been substantially resolved.
On April 13, a2 Milk said shortfalls of China label infant formula product at distributors and retailers would materially impact in-market product availability in the quarter.
These product shortfalls were because of several factors, including strong demand in the preceding quarter, freight challenges, Synlait production backlog, extended product release times, and additional customs clearance requirements and testing measures, a2 Milk said.
In a statement today, the company confirmed that China label formula product availability was “materially impacted” by these factors in the fourth quarter, which necessitated a large proportion of existing users to switch to alternative brands, with some users switching to a2 English label products.
“The product availability impact on English label infant milk formula product was limited and largely concentrated on a2 Genesis, which was affected by planned production downtime at a2 Pokeno and a change in China importation requirements,” the company said.
“The supply chain issues materially impacted China label infant milk formula sales in fourth quarter 2026, with 2026 sales down approximately 14% on 2025,” it said.
All other a2 Milk product categories, including English label, other nutritionals and liquid Milk, have performed strongly and were up significantly on 2025’s.
A2 Milk said the contributing factors to the product availability issues “have now substantially been resolved”.
Product flows to distributors and retailers have materially improved across China label and English label products with stock levels returning to target levels, the company said.
A2 said it was now focused on various sales and marketing initiatives to encourage previous China label infant formula users to return while accelerating new user recruitment with its retail and distribution partners.
All other a2 Milk product categories, including English label IMF, other nutritionals and liquid milk, performed strongly and were significantly up on 2025.
The company expects to deliver 2026 results in line with, or slightly ahead of, the guidance range previously announced on April 13.
A2 Milk expects revenue of about $1.97 billion, up over 12% on 2025, compared with an April guidance of mid double-digit growth.
The company said its net profit would be up slightly on 2025’s, compared with an April net profit guidance of “similar to slightly down”.
A2 Milk, which has a June 30 balance date, is due to report its annual result on August 17.
By mid-morning, a2 Milk’s share price had rallied by 25c or 2.7% to $9.60.
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
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