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A2 accuses dairy giant of suppressing milk defects

By Deborah Hill Cone

Friday 1st November 2002

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Biotech company A2 Corporation yesterday launched a High Court lawsuit against Fonterra Co-operative Group, accusing it of covering up the allegedly harmful effects of A1 milk, including research showing a link between "bad milk" and mental disorders.

A2 Corporation claims Fonterra, the country's largest business, has secretly registered a patent application for the rights to intellectual property showing a connection between A1 milk and autism or Asperger's syndrome ­ but has kept the public in the dark about the link for more than two years.

The case is the latest shot in an increasingly antagonistic battle between A2 and Fonterra over claims of health benefits from non-A1 milk.

Documents obtained by The National Business Review show A2 will rely on a confidential Dairy Board (now Fonterra) memo from October 2000 in which top executives were warned by the group's own scientists there was growing evidence that peptides released from A1 milk may be related to the occurrence of some mental disorders.

"If the media (or A2 Corporation) were ever able to assemble the information shown in this paper they could put an alarmist spin on the whole area of milk consumption or alternatively leap to conclusions about A1 vs A2 effects before a case is proven either way," the memo, written by Fonterra research scientist Dr Jeremy Hill, who worked with Professor Bob Elliott on the original research, says.

A2 Corporation was formed two years ago to commercialise research indicating beta casein A1, a protein in cow's milk, may be a major risk factor for developing type 1 diabetes and coronary heart disease. By selecting A2 cows the risk could be avoided, the company claims.

A2 has been at loggerheads with Fonterra over the significance of the research and who owns the rights to it as well as whether New Zealand's herd, three-quarters of which produces A1 milk, should be tested and re-engineered as a result.

Fonterra's position is that the research so far has not been conclusive as the studies show only a co-relation between A1 milk and health risks not a cause and effect ­ and therefore it does not justify issuing warnings.

The lawsuit risks inflicting catastrophic damage to New Zealand's international reputation and foreign earnings as Fonterra turns over $14 billion and makes 20% of the country's total offshore receipts.

As if that would not be enough of a PR disaster as the country tries to maintain its position as a clean, green food producer, A2 Corporation is going to ask the court under the Fair Trading Act to order Fonterra to put health warnings on its A1 milk setting out the risks of type 1 diabetes, heart disease, autism and schizophrenia.

A2 also wants the court to force Fonterra to publicly disclose all the information it has about the links between A1 milk and health risks.

Barrister Julian Miles QC for A2 will argue Fonterra has been negligent in not warning the public about the research suggesting A1 milk is unsafe for some people.

A2 claims Fonterra has been "materially influenced" by its commercial objective of continuing to sell A1 milk and consumers of A1 milk are continuing to suffer from diseases of diabetes, heart disease, autism and schizophrenia as a result.

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