The a2 Milk Company has written to its former chief executive, Jayne Hrdlicka, demanding she correct alleged “inaccuracies” in a story that appeared in the Good Weekend magazine over the past weekend.
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The a2 Milk Co emailed its former CEO Jayne Hrdlicka Monday, asking her to correct alleged inaccuracies in a newspaper magazine article. Kristoffer Paulsen

Ms Hrdlicka is now CEO of Virgin Australia, but previously was in the top job at the infant formula and milk company for 18 months before making a sudden exit in December 2019.

She departed after tensions with the board, and while her husband was dealing with a cancer diagnosis – which left her feeling she was unable to perform the role.

The article was wide ranging, covered her life in the United States and her new job as only one of a handful of women running an airline in the world.

The a2 Milk board, lead by David Hearn, sent Ms Hrdlicka an email on Monday afternoon asking her to correct some of her statements made to GW about her time at a2 Milk.

“The article you refer to contains several inaccuracies and is littered with misinformation,” an a2 Milk spokesman said.

“We have written to Ms Hrdlicka to give her the opportunity to get them corrected. We will not be commenting on this matter at this time and until we see the outcome of our request.”

Profit margins

An a2 Milk spokesman declined to comment on the contents of the email, but one prior bone of contention was around the $NZ20 million spent on consultancy fees by Ms Hrdlicka in 2018-19. As marketing costs climbed to $NZ135 million, margins were squeezed. The market did not like it, and neither did the board.

Ms Hrdlicka said at the a2 Milk annual meeting in November 2019 that full-year profit margins would be in the range of 29 per cent to 30 per cent, higher than in August when they were downgraded.

Ironically, A2 Milk’s profit margins have been lowered several times since, and the group earnings before interest, tax, depreciation and amortisation margin for the full year is now tipped to be in the range of 24 per cent to 26 per cent.

Ms Hrdlicka told GW that reports at the time of her departure that she had spent up on consultants from Bain & Company – where she had been a partner previously – “were ‘BS’ and that only a small portion of that went to her former employer”.

Geoff Babidge, who returned to run a2 Milk after Ms Hrdlicka’s departure, cut consultancy fees. Mr Hearn said at the time Ms Hrdlicka was a “change agent”, and the board was still behind her strategy, but there would now be more focus on preserving profit margins and less on chasing market share.

He also said she “ruffled a few feathers” along the way.

Ms Hrdlicka, who also chairs Tennis Australia, told GW the baby formula company did not handle her exit well, but she declined to comment when contacted by The Australian Financial Review, saying as she was not aware of any email from a2 Milk.

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