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A2 Announces Intention To Form JV

A2 Announces Intention To Form JV With So Natural Foods For Australia And Japan

Auckland, 14 December 2006 - A2 Corporation Limited (NZAX: ATM) ("A2C") announced today that it has signed a terms sheet with So Natural Foods Australia Limited (ASX: SNF) ("SNF") relating to the formation of a 50/50 joint venture company which will be granted exclusive rights for the production and sale of a2 milk(tm) products in Australia and Japan.

A2C's current operations in Australia will be transferred into the new entity. The transaction is subject to due diligence, board and other relevant approvals, and the finalization of formal documentation, with a proposed completion date of 30 March 2007.

SNF is an emerging public company focused on building a leading position in functional and nutritional foods in Australia and targeted international markets through a focus on brand development, product innovation, sales, marketing and distribution. SNF provides a wide range of foods and beverages that encourage better health and vitality in Australia and has a relationship with the major functional dairy group Yakult Honsha in Japan.

As well as providing significant dairy industry knowledge, access to further milk supply through its majority shareholder and retail grocery expertise, SNF will contribute a substantial cash investment to support the ongoing development of the joint venture company.

Mr Clifford Cook, Chairman of A2C stated: "This presents a significant opportunity to accelerate the expansion and growth of the A2 business in Australia, and entry into Japan. We believe there is a natural fit between A2C and SNF's focus on functional foods that seek to provide health benefits beyond basic nutrition."

Mr Geoff Babidge, CEO of SNF stated: "SNF is very pleased to be able to jointly participate with A2C in the expansion and growth of the A2 business in Australia and into the Japanese market where SNF is conducting business through its Thorpedo Foods joint venture".


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