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A class action has been filed against a2 Milk Company on behalf of investors who bought shares over a nine-month period during which the infant formula maker posted four earnings downgrades.

The claim, filed in the Supreme Court of Victoria, is being brought on behalf of shareholders who suffered losses after acquiring a2 Milk shares on the ASX and NZX between 19 August 2020 and 9 May 2021.

The class action alleges that a2 Milk engaged in misleading or deceptive conduct in breach of the Corporations Act. The Company is also accused of breaching continuous disclosure rules in posting four downgrades on September 28 and December 18 last year, and February 25 and May 10 of this year.

On May 10, a2 Milk flagged a review of its key China business and a blowout of more than $NZ100 million ($92.9 million) in provisions for old stock. The latest cut to its outlook resulted in a2 Milk expecting full-year sales of $1.2 billion-$1.25 billion and a group EBITDA margin of 11-12 per cent. This compared to August 19, 2020, guidance for strong sales growth and an EBITDA margin of 30-31 per cent.

Slater and Gordon Class Actions Practice Group Leader Kaitlin Ferris said a2 Milk was or ought to have been aware that the full-year FY21 guidance did not adequately consider factors likely to impact the Company’s financial performance.

This includes a2 Milk’s attempts to boost sales by pushing English label infant formula tins through the cross-border e-commerce channel with discounting consequences that would in turn negatively impact sales in the daigou channel.

It is also alleged that a2 Milk’s sales in the CBEC channel would in turn be impeded by the disruption to the daigou/reseller channel and the loss of associated marketing activity to stimulate consumer demand.

“As a result of our investigation following a2’s profit downgrades throughout FY21, we concluded that there was a strong basis to allege that the company provided misleading guidance and was obliged to correct the market’s understanding of its financial position at a much earlier time,” Ms Ferris said.

“Investors are entitled to assume that when they purchase shares in a listed company, all of the material information relevant to its financial position has been disclosed. The repeated downgrades by a2 during the August 2020 to May 2021 claim period caught the market by surprise and revealed that a2 had been facing systemic and structural issues with its distribution networks at an early stage of the financial year.”

Ms Ferris said the claim had been issued on an open class basis, and therefore covers all shareholders who purchased shares in a2 Milk between 19 August 2020 and 9 May 2021 on the ASX or NZX. Group members can access further information and updates about the proceeding by contacting Slater and Gordon at

Media Contact: Andrea Petrie on 0428 994 937