The “global first” of $5 per gallon of “raw” milk hasn’t been the innovative gold mine the founders of diary tech startup Made by Cow had hoped for, with the company placed under voluntary management and closing its doors last week.

The Sydney startup developed a patented method of treating milk so it was safe to drink without using it heat pasteurization, calling it “cold pressed raw milk” – a riff on the technique used by the extra virgin olive oil industry. While milk is normally heated to 72°C to kill bacteria and make it safe for human consumption, Made By Cow has developed technology to treat milk under high pressure in the bottle to eliminate pathogens and retain more nutrients. It also gave the milk a shelf life of six weeks.

Unpasteurized milk – it is illegal to sell for human consumption – became a fad in Australia about a decade ago, using a loophole as a cosmetic product or “bath milk”. Authorities cracked down after one child in Victoria died in 2014 after drinking raw milk.

Made By Cow pioneered a legal alternative around 2016 and within a few years the product, made with milk from a Jersey herd on the south coast of NSW, was available from leading supermarket chains including Harris Farm, IGA and Coles. It was founded by food entrepreneur Saxon Joye, co-founder of Care Food Co and Jucci.

But last week the dream soured and CEO Wade Porter handed the company over to Kate Conneely and Scott Kershaw in KordmaMentha under voluntary control, and production stopped at Homebush in western Sydney.

Porter said in a post on Instagram that it was “a very difficult decision to stop production”, but that the “company has faced economic uncertainty and supply chain challenges” amid rising interest rates and inflation.

“We are proud of our incredible journey and of creating a truly innovative product that has been enjoyed by thousands of loyal customers,” he said.

“We’ve been on a strong trajectory over the past few years with over 50% year-over-year growth.”

Porter thanked his dedicated customer base.

“We started as an unknown dairy brand trying to do something different and have grown into a brand that many of you love,” he wrote.

“Thank you for believing in us, the growing demand and love for our milk has made every day’s hard work worth it.”

When Made By Cow held a media launch in mid-2019, Porter said at the time that he was approached by seseveral countries interested in the patent technology they had developed.

That IP and the company’s equipment could appeal to potential buyers, but the fresh milk market remains a highly competitive, low-margin industry, despite high dairy consumption by Australians.

KordaMentha has been contacted for comment. A first meeting of creditors is scheduled for June 6.