Environmental and Social Concerns of a2 Milk Company

This case study analysis focuses on the key environmental and social concerns faced by a2 Milk Company in its business operation. It discusses the company's initiative to commercialize a genetic test on cows to determine if a cow can produce milk without A1 protein, which created major concerns. The report suggests three potential environmental and social objectives and a thorough recommendation for the Company.

Running head: Case study analysis of a2 Milk Company
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Case study analysis of a2 Milk Company

Case study analysis of a2 Milk company 1
Executive summary:
Purpose: The aim of the report is to understand the key environmental and social concerns
faced by A2 Milk Company in its business operation.
Method: The study is based on secondary research and both academic and non-academic
source s have been used to understand the concerns.
Findings: The successor of A2 Corporation Limited, The a2 Milk Company was founded by
the researcher Dr McLachlan and one of the important stakeholders of Fonterra, Howard
Paterson. The Company aimed at producing high quality milk that would fight against
various diseases at a very expensive price.
Conclusion: The Company has to narrow down its price in order to compete with the order
companies in the market.
Recommendations: A2 Milk Company can take the initiative to launch different products for
people of different age groups.
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Case study analysis of a2 Milk company 2
Table of Contents
Introduction:...............................................................................................................................3
Key environmental and social concerns:....................................................................................3
Three potential environmental and social objectives:................................................................4
Recommendations:.....................................................................................................................5
Conclusion:................................................................................................................................6
References:.................................................................................................................................7
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Case study analysis of a2 Milk company 3
Introduction:
The a2 Milk Company has been found to impact the operating environment in a
number of ways and the Company has undertaken certain initiatives to minimise those
impacts (Thea2milkcompany.com, 2018). The aim of the report is to identify the key
environmental and social concerns related to the operations of the Company. Followed by
this, the report will aim at suggesting three potential environmental and social objectives and
a thorough recommendation for the Company.
Key environmental and social concerns:
The a2 Milk Company has been in news for certain environmental and social
concerns in its business operation. It has been found that the company had taken initiative to
commercialise a kind of genetic test on cows to determine if a cow can produce milk without
A1 protein. This initiative to develop a herd that would only produce a2 milk created major
concerns. In the article, Trivedi and Deth, (2016) stated that the initiative was delayed by the
opposition from Fonterra because it had around 98% of New Zealand’s dairy farms.
However, Paterson attempted to force High Court of New Zealand to put health warnings
because the milk can lead to various diseases like schizophrenia, type 1 diabetes, autism and
even major heart disease (Wilkinson & Garnsworthy, 2017). As a consequent to this act, the
entire economy of New Zealand was threatened and Fonterra also had troubles in managing
the international reputation as this company was responsible for exporting more than 20% of
products from New Zealand (Landcareaustralia.org.au, 2018). This act was one of the major
environmental concerns that the company had brought to the country.
If the social concerns related to A2 Company are considered, it has been found that
the company has been selling its milk at a rocketed price compared to the other companies in
the market claiming that the milk is better as it contained both A1 and A2 proteins that will
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Case study analysis of a2 Milk company 4
not result in indigestion. In such claims, the major stakeholders like Nestle and other big
companies coming up with better formulas decided to sell their own brand to A2 Milk
Company so that the products can be sold easily in the market of China. Major shareholders
like the fund managers Colonial First State Global Asset Management, Greencape Capital Pty
Ltd and Challenger Managed Investments Ltd had to lower down their position
(Thea2milkcompany.com, 2018).
Three potential environmental and social objectives:
The primary objective of the Company was to supply better quality and healthy milk
to the customers that would not result in certain diseases like diabetes, autism or heart related
problems (Jianqin et al., 2015). However, at the same time the Company also wanted to
increase its business and capture the market of Australia, New Zealand and China by
claiming that their products are the best.
Dimension Objective Possible Performance Measures
Environmental 1. To achieve sustainability
a. By the means of Sustainable Agriculture Grant
program.
b. By funding the farmers to take sustainable
funding policies (Landcareaustralia.org.au,
2018).
2. To enhance positive
environmental outcome
a. The program also suggests increasing
productivity of food along with increased
biodiversity and better pasturing health (Trivedi
& Deth, 2016).
b. The Company also focused on lesser usage of
pesticides or harmful chemicals for the farms.
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Case study analysis of a2 Milk company 5
3. Promising better health of
the herds
a. The nutrients supplied to the herd and cattle
were of good quality to ensure better health of
the animals.
b. Improved health would also helped in the
improved health and the efficiency of the
biodiversity.
Social 1. To establish a brand power
a. As a result of an infamous milk powder
scandal, the demand of milk of A2 company
increased in China (Wilkinson & Garnsworthy,
2017).
b. The situation became really challenging for
the competitors.
2. Major stakeholders had to
sell down
a. The expensive milk resulted in backing out of
major stakeholders.
b. It was understood that the milk is just
expensive and other companies can offer similar
products as well.
3. A crackdown in China on
gray-market imports
a. As a result of A2 Milk Company in China,
other companies like Bellamy’s Australia and
Blackmores Ltd turned away from using daigou
b. It was in 2006 that these companies shifted to
sell their products via Chinese partners
(Thea2milkcompany.com, 2018).
Recommendations:
It has to be understood by the Company that milk does not equate with riches and
thus, the company has to cut down the price of its product. This situation is most important
when it comes to New Zealand dairy that faces toughest challenges in terms of farm gating
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prices in the recent seasonal condition in past few years (Navarro et al., 2015). The market is
getting boasted with digestive benefit products. In addition to this, as commented by
Banerjee, (2018), the company can also come up with variety of products for infants or
people belonging to different age groups considering the health benefits.
Conclusion:
A detailed analysis on the social and environmental concerns of a2 Milk Company
has been discussed. It has been found that the company claimed to supply best quality milk at
a very expensive price compared to others as a result of which many stakeholders had to
suffer. Considering milk to be white gold, the company has to reduce the price of its milk.
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Case study analysis of a2 Milk company 7
References:
Banerjee, S. (2018). A2 Milk: The Unknown Story About a Milk Protein. Acta Scientific
Nutritional Health, 2, 28-31. Retrieved from:
https://actascientific.com/ASNH/pdf/ASNH-02-0057.pdf [Accessed on: 18-9-2018]
Jianqin, S., Leiming, X., Lu, X., Yelland, G. W., Ni, J., & Clarke, A. J. (2015). Effects of
milk containing only A2 beta casein versus milk containing both A1 and A2 beta
casein proteins on gastrointestinal physiology, symptoms of discomfort, and cognitive
behavior of people with self-reported intolerance to traditional cows’ milk. Nutrition
journal, 15(1), 35. Retrieved from:
https://nutritionj.biomedcentral.com/articles/10.1186/s12937-016-0147-z [Accessed
on: 18-9-2018]
Landcareaustralia.org.au (2018) The a2 Milk Company Retrieved from:
https://landcareaustralia.org.au/our-partners/corporate-partners/a2-milk-company/
[Accessed on: 18-9-2018]
Navarro, E. F., Faure, G., Cortijo, E., De Nys, E., Bogue, J., Gómez, C., ... & Le Gal, P. Y.
(2015). The impacts of differentiated markets on the relationship between dairy
processors and smallholder farmers in the Peruvian Andes. Agricultural Systems, 132,
145-156. Retrieved from:
https://www.sciencedirect.com/science/article/pii/S0308521X14001358 [Accessed
on: 18-9-2018]
Thea2milkcompany.com (2018) Latest Company News Retrieved from:
https://thea2milkcompany.com/newsroom/latest-news/2018-fy-results-summary/
[Accessed on: 18-9-2018]
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Trivedi, M., & Deth, R. (2016). Clinical and pre-clinical evaluation of the effect of different
type of beta-casein on redox and epigenetic status. Retrieved from:
https://nsuworks.nova.edu/hpdrd/2016/events/142/ [Accessed on: 18-9-2018]
Wilkinson, J. M., & Garnsworthy, P. C. (2017). Dietary options to reduce the environmental
impact of milk production. The Journal of Agricultural Science, 155(2), 334-347.
Retrieved from: http://eprints.nottingham.ac.uk/39513/1/Wilkinson%20and
%20Garnsworthy%202017%20accepted.pdf [Accessed on: 18-9-2018]
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