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Sales of a2 Milk™ have increased by 8 per cent, defying the fall in branded milk sales.

Sales of some milk brands dropped in Coles stores more than 30 per cent after the supermarket giant’s decision to slash the price of its house-brand milk to $1 a litre on Australia Day.

But a2 Milk™ Executive General Manager Peter Nathan said sales had increased since the price war began.

The niche product, made of milk from cows with only the A2 beta-casein protein gene, spruiks a range of health benefits and has lifted its market share to over 3.5 per cent.

Mr Nathan said sales had increased because A2 consumers were prepared to pay for the extra health benefits.