The a2 Milk Company CEO Geoff Babidge said the market disruption was impacting September sales and was expected to continue for the remainder of the first half of FY21.

“Sales in the daigou channel represent a significant proportion of infant formula sales in our Australia & New Zealand (ANZ) business and, as such, we now expect ANZ revenue to be materially below plan for the first half,” Babidge said.

The company said it expected revenue of between NZ$725-775 million (all dollars in NZ), below the $806.7 million reported in the first half of FY20.

Full-year revenue is expected to be between $1.8-1.9 billion, up on the $NZ1.73 billion reported in FY20.

Babidge said the company believes this to be a “single channel logistics issues” for the short-term “assuming stabilisation of COVID-19 related issues”, as strong underlying consumer demand for the brand remains in China.

“The increasingly strong underlying brand health metrics we are achieving in China IMF, including market share and brand awareness for example, confirm the effectiveness of our continued significant investment in marketing to drive future growth,” he said.

“These factors underpin our confidence of a significant improvement in overall Group performance in the second half of the year once the disruption in the daigou channel is reduced.”

In August, the company announced it would take a 75.1 per cent stake in New Zealand dairy nutrition business Mataura Valley Milk (MVM) for around $245 million (NZ$270 million), and announced its total revenue increased by nearly a third on the previous year in its FY19 results.

“We also continue to see a positive impact from the marketing investment in activation and brand building activities from 4Q20. This strong performance continues to be well supported by the on the ground capability investments we have made over the past 18-24 months,” said Babidge.