A2 Milk Company share price on watch after announcing Canada launch

The A2 Milk Company Ltd (ASX:A2M) share price will be on watch after announcing its launch into the Canada market…

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The a2 Milk Company Ltd (ASX: A2M) share price will be one to watch on Thursday.

This follows the release of an announcement this morning which reveals that the infant formula and fresh milk company is expanding into a new market.

What did a2 Milk Company announce?

This morning a2 Milk Company announced that it has entered into an exclusive licensing agreement with Agrifoods Cooperative (Agrifoods) for the production, distribution, sale and marketing of a2 Milk branded liquid milk for the Canadian market.

The agreement will see a2 Milk Company provide Agrifoods with access to its intellectual property and marketing assets, as well as its proprietary systems and know-how relating to the sourcing and processing of a2 Milk. It will also work with Agrifoods and local Canadian dairy farmers to source milk locally.

Agrifoods intends to leverage its substantial capabilities in-market to establish distribution across Canada and has the primary responsibility for funding this venture.

No launch date has been confirmed, but the company expects that a range of liquid milk products will be released later in the calendar year.

a2 Milk Company's CEO, Geoffrey Babidge, said: "We are very pleased to form this partnership with Agrifoods through a well-structured license agreement. This arrangement gives us the ability to leverage the brand development work we have already undertaken in North America and expand into the Canadian market with a well-respected partner."

The Agrifoods CEO, Maheb Nathoo, was pleased to partner with a company he believes is an innovator in the industry.

Mr Nathoo said: "This is an excellent partnership and we are excited to be able to offer a2 Milk products to Canadian consumers. The a2 Milk Company is an innovator in the dairy industry and we are delighted to be partnering with them."

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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