Shares in A2 Milk are sharply lower after a report that global food and dairy giant Nestle has launched an infant formula product that uses the A2 beta-casein protein, the same protein that is the mainstay of A2 Milk’s products.

The New Zealand Herald said Nestle has launched its A2 product under the brand Illuma and that it is already available in China.

A2 Milk shares were 72 cents, or 5.5 per cent, lower at $12.32 at 1252 AEDT, after going as low as $11.86.

Cows milk contains the A1 beta-casein protein and the A2 beta-casein protein.

A2 Milk says A1 and A2 proteins affect digestion differently and that milk containing only the A2 protein may benefit people who experience discomfort from drinking cow’s milk.

A2 Milk shares have soared since the New Zealand-based company reported in February that its first-half profit had more than doubled and that A2 Milk had entered into an alliance with global dairy giant Fonterra to produce new products and expand into new markets.

A2 Milk also has a supply alliance with Synlait Milk.

A2 Milk has been increasing its market share in Australia and China on the back of strong sales of its A2 Platinum infant formula.

A2 Milk said in February that it expected broader interest in the A1 protein-free category over time.

“Given its pioneering heritage, its comprehensive suite of intellectual property and a business model focused solely on products free of the A1 protein type, the company is well positioned to respond,” A2 Milk had said.