The national cheese contract will generate approximately $130 million in additional sales per annum.
Murray Goulburn Co-operative has entered a five-year national private label contract to supply Coles brand Australian cheese.
It is part of MG’s ongoing push to secure critical mass in the important Australian dairy foods market which will underpin and support the company’s growth plans.
The announcement follows the landmark, ten-year partnership MG commenced with Coles in 2014 to supply daily pasteurised milk for Coles private label brands in Victoria and NSW.
The contract includes the supply of a range of Coles brand cheddar-style cheese including tasty, colby, mild and light cheese in blocks, shreds and slices for Coles supermarkets across Australia.
The national cheese contract will generate approximately $130 million in additional sales per annum and importantly deliver a stable stream of profits to MG over the life of the contract.
The competitiveness of MG’s tender proposal for the cheese contract was enhanced by efficiency gains expected to flow from the investment MG is making to build a world-class cut and wrap consumer cheese processing facility at its Cobram cheese plant.
As part of its capital investment program, MG has announced plans to invest up to $145 million to significantly increase ‘ready-to-serve’ cheese capacity and capabilities at its new consumer cheese plant in Cobram.
MG Managing Director, Gary Helou, said: “We are delighted to extend our existing relationship with Coles and its customers to deliver the quality, taste and freshness of cheese made by Australia’s largest dairy farmer co-operative, which is 100 percent controlled by Australian farmers.”
“MG is pursuing a growth and value creation strategy to deliver profitable growth and insulation from the challenges of volatile global dairy commodity prices. As part of this we are ramping up our manufacturing capability and capacity to produce and market a wide range of Australian made ‘ready-to-consume’ dairy foods for our domestic and international markets.
“This additional Coles business complements our investment strategy to build a state-of-the-art supply chain and adds to our critical mass here in Australia, as we look to substantially grow our business internationally.
“MG’s continuing capital investment program will ensure we have world-leading, lowest cost manufacturing capability and improved flexibility to produce dairy foods products that meet the tailored and sophisticated needs of our customers and consumers here in Australia and internationally.