New Zealand-based a2 Milk has exposed a critical vulnerability in premium dairy: strong consumer demand is not enough if supply chains cannot keep products on shelves in key markets. Its FY2026 attributable net profit fell 44% to NZ$113.6 million, from NZ$202.9 million a year earlier.
The biggest pressure came from China, a2 Milk’s largest market.
- China-label infant milk formula revenue fell 14% to NZ$544.3 million, after production backlogs, strong third-quarter demand and higher freight costs caused shortages in the June quarter. The disruption forced many existing customers to switch to competing brands.
- The underlying business was stronger than the headline profit suggests: underlying FY2026 profit rose 7% to NZ$235.8 million, while revenue from China & other Asia increased 11.2% to NZ$1.45 billion, supported by English-label infant formula sales.
- The recovery will take time. a2 Milk said inventory levels have significantly improved, but expects FY2027 revenue growth only in the mid-single digits, with the disruption continuing to affect performance and recovery skewed toward the second half. (Reuters)
For dairy companies targeting premium international markets, the lesson is clear: supply-chain resilience is not an operational afterthought—it is a brand and revenue protection strategy. When consumers cannot find a trusted product, they may not wait; they switch.
Source: Dairynews7x7 18 Aug, 2026 Read full story here
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