New Zealand-based global dairy nutrition company Fonterra Co-operative Group has entered a partnership with Australian milk brand The a2 Milk Company (a2MC).

Aiming to grow local and international demand, the deal will see a2MC’s brand capabilities combined with Fonterra’s global supply chain, manufacturing capabilities, in-market sales and distribution capacity.

Under the deal, Fonterra will begin discussions with its farmers on the best way to source A2 milk for a2MC products in New Zealand. This will help the brand to expand its business in South East Asia and the Middle East markets.

“The partnership is intended to fast-track market growth and this creates an opportunity for our farmers to create additional value from their milk.”

It is reported that similar discussions will occur in the future regarding the Australia market.

Fonterra CEO Theo Spierings said: “The partnership is intended to fast-track market growth and this creates an opportunity for our farmers to create additional value from their milk.

“Fonterra’s high-quality milk pools, our global supply chain, our manufacturing capabilities and knowledge, and our in-market sales and distribution expertise is being combined with a2MC’s brand strength to unlock new opportunities in a wide range of international markets.”

As per the nutritional products manufacturing and supply agreement (NPMSA), Fonterra will exclusively supply milk powder products manufactured at the company’s facilities in New Zealand and Australia for mass and retail sale in a2MC’s new priority markets, with established distribution and sales arrangements by both the companies.

a2MC’s branded butter, cheese and China-sourced liquid milk will be explored for sale in Australia, New Zealand and China.

The companies will also create a jointly-owned packaging facility.