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Nestlé to launch A2 baby formula in A2 Milk's home region

Nestlé SA will launch its own brand of A2 baby milk in Australia and New Zealand, challenging Auckland-based dairy company a2 Milk Co. Ltd., which holds a dominant market share in the region.

Citing an interview with Tarun Malkani, Nestlé's global business head for Wyeth Nutrition, The Australian Financial Review reported that the Swiss food and beverage giant will launch its NAN A2 brand in Wesfarmers Ltd.-owned Coles supermarkets and online in Australia in the week of Oct. 15.

The company is also planning to offer the S-26 Atwo brand at select Woolworths Group Ltd.-owned Countdown stores in New Zealand in November, the report added.

The milk products manufacturer already offers A2 milk to consumers in Australia, New Zealand, the U.S., the U.K., Singapore, and in China and Hong Kong through Alibaba Group Holding Ltd.'s Tmall online marketplace. The company's A2 milk contains 100% natural fresh cows' milk with only the A2 protein, a formula that Nestlé now ventured into.

Malkani told the newspaper that Nestlé will capitalize on the strength of its brand. "It comes down to the power of the brand. In this case it happens to be the A2 offering, but it's still about the brand," the executive reportedly said.

The launch of Nestlé's new A2 milk products follows the rollout of the company's Illuma Atwo formula brand in China in February, according to the report.

Malkani told the Financial Review that the success of Illuma in China prompted the company to expand into new markets.

The report added that Nestlé is also looking to launch an A2 product in other markets, including the U.S.