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A2 Milk Class Action

Shine Lawyers has launched a class action on behalf of shareholders who suffered losses after acquiring A2 Milk shares (A2M) on the ASX or on the NZX following a 62% drop in market value in FY21.

If you acquired A2M shares between 19 August 2020 and 7 May 2021, you may be eligible to join this class action.


What is the A2 Milk Class Action about?

The class action alleges that between 19 August 2020 and 7 May 2021, A2M engaged in misleading and deceptive conduct, breaching its continuous disclosure obligations, and failing to adequately disclose future trade plans.

It is further alleged that by 19 August 2020, A2M was, or ought to have been aware that their FY21 guidance, and subsequent representations, did not adequately take into account a number of factors known to A2M which ultimately impacted the Company’s financial performance, resulting in a 62% drop in market value in FY21. These factors include:

  • The decline in daigou or reseller sales, which fell due to the impact of A2M’s sales through its Cross Border e-Commerce Channel (CBEC). This saw A2M heavily market English labelled infant products directly into the Chinese market with discounting that effectively undercut their sales in the daigou or reseller channel; and
  • The decline in the CBEC business due to the decline in daigou or reseller sales, as daigou sales often help stimulate demand for direct orders.

If you acquired A2M shares between 19 August 2020 and 7 May 2021, you may be eligible to join this class action.

Why choose Shine Lawyers’ Class Action Team

Shine Lawyers’ Class Actions Team possess the skills, industry insight and dedication to deliver exceptional results for everyday Australians. We have fought for successful outcomes for group members in class actions against high profile corporate and government entities, including Johnson & Johnson and DePuy International, as well as the Department of Defence.

Craig Allsopp, who leads this class action, has extensive experience as a solicitor and specialised expertise in shareholder class actions. Craig leads a team of highly skilled lawyers with a proven record in complex, multi-party litigation.

To learn more about our work in this area of law, visit our Class Actions page.

Can I join the A2 Milk Class Action?

To be part of this class action you must have:

  • Purchased shares in The A2 Milk Company Limited (ASX:A2M) during the period 19 August 2020 to 7 May 2021.

If you meet this criteria, you may be entitled to compensation, and you are encouraged to register for the A2 Milk Class Action.

How to register for the A2 Milk Class Action

To register on a confidential, no-cost, no-obligation basis, please click the button below and fill out the form.

Sign up for the class action

Register now

If you have any questions or require any assistance in registering for the class action, please contact our A2 Milk Class Action Team at [email protected] or on 1800 325 172.

Background to the A2 Milk Class Action

Shine Lawyers’ Class Actions Team commenced a class action against A2M following reports of alleged misconduct in connection with multiple downgrades of the milk company’s expected revenue in FY21.

The following timeline highlights the series of events that led to the drop in market value:

  • The company reported its results for the financial year ending 30 June 2020. A2M reported it achieved revenue of $1.73 billion and an EBITDA to sales margin (EBITDA margin) of 31.7%. In the same announcement, the company provided guidance for the 2021 financial year, stating that it expected to continue its strong revenue growth and to achieve an EBITDA margin of 30% to 31%.

  • A2M announced that it expected its FY21 group revenue to be between $1.8 billion and $1.9 billion and that its group EBITDA margin would be 31%.

  • A2M went into a trading halt pending an announcement regarding its previously issued guidance to the market.

  • A2M announced a downgrade to its expected FY21 group revenue from between $1.8 billion and $1.9 billion to between $1.4 billion and $1.55 billion. The group EBITDA margin was also downgraded from 31% to between 26% and 29%.

  • A2M announced that it expected its FY21 group revenue to be at the lower end of its previously downgraded guidance, being $1.4 billion, and that it’s group EBITDA margin would drop to between 24% and 26% (excluding MVM transaction costs).

  • A2M announced a further downgrade of its expected FY21 group revenue from $1.4 billion to between approximately $1.20 billion and $1.25 billion. The group EBITDA margin was also significantly downgraded to between 11% and 12% (excluding MVM transaction costs).

The Share Price Drop

  • Immediately following the 28 September 2020 announcement, A2M’s share price opened at $15.41 and closed at $15.31, down from the previous day’s close of $17.20 (a reduction of $1.89 or approximately 11%).

  • The share price continued to fall immediately following the 18 December 2020 announcement, where A2M’s share price opened at $9.97 and closed at $10.23, down from the previous trading day’s close of $13.28 (a reduction of $3.05 or approximately 23%).

  • Again, immediately following the 25 February 2020 announcement, A2M’s share price opened at $8.85 and closed at $8.77, down from the previous day’s close of $10.45 (a reduction of $1.68 or approximately 16%).

  • Finally, immediately following the 10 May 2021 announcement, A2M’s share price opened at $6.05 and closed at $6.09, down from the previous day’s close of $7.00 (a reduction of $0.91 or 13%).

  • Over the period from 19 August 2020 to 7 May 2021 A2M shares lost two thirds of their value.

Case Documents

A2 Milk Class Action Group Proceeding Summary Statement SealedA2 Milk Class Action Writ and Statement of Claim Sealed

Who is Shine Lawyers’ Class Action Team?

Shine Lawyers’ Class Action Team includes some of the firm’s most experienced solicitors and support staff. The team includes:

Common Questions

There are three criteria that need to be fulfilled for a class action to take place:

  • There must be seven or more people claiming;
  • The claims must arise out of the same, similar, or related circumstances; and
  • The claim must relate to at least one common issue of law or fact.

Class actions in Australia work on an opt-out model. This means that all potential claimants become group members of the action whether they intend to participate or not. These group members are bound by the judgment of the court or settlement unless they opt-out. The group members in a class action are usually notified about the class action by order of the Court.

Due to the size of each individual claim, the costs of running this action as an individual would quickly exceed the potential damages recoverable. As each group member’s claim involves many common questions of fact and law, running this action as a class reduces the average cost of litigation to a client by only addressing the common issues once at trial, instead of multiple times.

Due to the nature of class actions, the first stage of the proceedings can take between twelve months to three years or more from its commencement.

Unless a settlement is reached, the first stage will only resolve the representative’s claims and the common issues of the proceedings, with group member claims to be resolved individually at a second stage of the proceedings.

It costs you nothing to join the class action, and you will not have to pay any out-of-pocket costs. You will have no liability for legal costs if the class action is unsuccessful.

Daigou, which means ‘buy on behalf of’ in Chinese, consists of a vast network of both retail or small and corporate resellers in Australia. The resellers take individual orders through platforms like WeChat and then ship requested products to China.

Daigou can fall into two categories:

  • Retail daigou: are generally a group of international students and tourists who purchase goods from retail stores and send them back to China; and
  • Corporate daigou: are digital marketing and consultancy companies that have large numbers of daigou agents in their business operations with formal channels or digital platforms to manage product procurement, delivery and other logistics.

Cross Border e-Commerce (CBEC) is a state sanctioned means of importing products into China. CBEC is where Chinese domestic consumers purchase goods from overseas via third party e-Commerce platforms. The platforms include Alibaba, Net Ease Koala and JD Worldwide. The advantage of CBEC for a business is that a Chinese presence, and thus compliance with Chinese regulations, are not required by the business.

CBEC is also characterised by frequent discounting to attract sales. Similar to black Friday and Boxing Day sales events, China has “11/11 singles day” in November and “6/18” in June.

Yes, whether you live in Australia, New Zealand or overseas, if you purchased shares in the A2 Milk Company Limited during the period 19 August 2020 to 7 May 2021, you are encouraged to join the class action.