Milk or Dairy Allergy vs. Lactose Intolerance

A milk or dairy allergy is a reaction to the protein in milk. There are two milk proteins, casein and whey. Some people are allergic only to one or the other. Most are allergic to both. The safest course in either case is to avoid all dairy products.
Lactose intolerance, also called lactase deficiency, means you aren't able to fully digest the milk sugar (lactose) in dairy products. The problem behind lactose intolerance is a deficiency of lactase — an enzyme produced by the lining of your small intestine.

With LI, most people can still have small or moderate amounts of milk. What's the difference? An allergy is an immune system reaction. Your immune system fights foreign invaders to the body using what are called antibodies. When these invaders are harmful bacteria or viruses, this is a very good thing. In people with allergies, however, the immune system reacts in the same way to dairy proteins that leak into the bloodstream instead of being properly digested. This can lead to a huge number of possible symptoms.
Children are the most likely sufferers of both allergies and hypersensitivities. Even breast-fed babies who have never touched formula can suffer from allergies, because dairy proteins can leak into the mother's milk. And even if this does not happen, they can rapidly develop allergies after their first exposure to milk-based formula or milk itself.

Taken from the Australian Breast Feeding Website:
There are some common fallacies about lactose intolerance that you may hear in the community:
1. Lactose in the breastmilk will be reduced if the mother stops eating dairy products.
2. Lactose intolerance in other family members (adults) means baby is more likely to be lactose intolerant.
3. If a mother is lactose intolerant then her baby will be as well.
4. A baby with symptoms of lactose intolerance should immediately be taken off the breast and fed on soy-based infant formula, or other special lactose-free formula.
5. Lactose intolerance is the same as intolerance or allergy to cows' milk protein.
Lactose intolerance is not possible in a baby unless it is an extremely rare genetic condition. That being true normal life would not be possible without medical intervention. A truly lactose intolerant baby would fail to thrive from birth (ie. not even start to gain weight), and show obvious symptoms of malabsorption and dehydration - a medical emergency case needing a special diet from soon after birth.
Anything that damages the gut lining, even subtly, can cause secondary lactose intolerance. The enzyme lactase is produced in the very tips of folds of the intestine, and anything that causes damage to the gut may wipe off these tips and reduce the enzyme production.
Note that cows' milk protein allergy (or intolerance) is often confused with lactose intolerance, and they are thought by many people to be the same thing. This confusion probably arises because cows' milk protein and lactose are both in the same food, ie dairy products. Also contributing to this confusion is the fact that allergy or intolerance to this protein can be a cause of secondary lactose intolerance, so they may be present together.
Secondary lactose intolerance is a temporary state as long as the gut damage can heal. When the cause of the damage to the gut is removed, for example the food to which a baby is allergic is taken out of the diet, the gut will heal even if the baby is still fed breastmilk. If your doctor does diagnose 'lactose intolerance' you need to know that this is not harmful to your baby as long as she is otherwise well and growing normally.
Occasionally it is considered preferable to reduce the immediate symptoms, by reducing the amount of lactose in the diet for a time, particularly if the baby has been losing weight. In this case, it may be suggested that the mother alternate breastfeeding and feeding the baby with a lactose-free artificial baby milk. Sensitivity of the baby to foreign protein (cow or soy) should be considered before introduction to artificial baby milk, as types other than the truly hypoallergenic ones may make the problem worse. Although commonly advised, there is no good evidence to support taking the baby off the breast altogether. In the case of a baby recovering from severe gastroenteritis, average recovery time for the gut is four weeks, but may be up to eight weeks for a young baby under three months. For older babies, over about 18 months, recovery may be as rapid as one week.

References:Brodribb W (ed), 2nd ed. Breastfeeding Management in Australia, Merrily Merrily Enterprises Pty Ltd 1997.Lawlor-Smith C & Lawlor-Smith L, 1998, Lactose intolerance, Breastfeeding Review 6(1): 29-30Leeson R, 1995, Lactose intolerance: What does it mean? ALCA News 6(1): 24-25, 27.Minchin M, Food for Thought, Alma Publications 1986.Rings EHHM et al, 1994, Lactose intolerance and lactase deficiency in children, Current Opinion in Pediatrics 6: 562-567.Woolridge M, Fisher C 1988, Colic, 'overfeeding' and symptoms of lactose malabsorption in the breast-fed baby: a possible artifact of feed management? Lancet (ii): 382-384.
If there is a concern regarding a baby’s sensitivity to lactose, please bring it to the health care professional and ask their advice regarding a lactose-free formula.