Murray Goulburn wins Coles cheese contract

Murray Goulburn said the contract would help give it “critical mass” in the Australian dairy foods market to underpin and support the company’s growth plans.

The announcement of the Coles cheese contract follows MG’s 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 Coles national cheese 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 contract will generate approximately $130 million in additional sales a year and deliver a stable stream of profits to MG over the life of the contract.

MG said the competitiveness of its tender for the cheese contract was enhanced by efficiency gains expected to flow from its investment to build a world-class cut and wrap consumer cheese processing facility at its Cobram cheese plant.

MG 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 the cooperative was pursuing a growth and value creation strategy to deliver profitable growth in Australia and help insulate the company 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.

“Ultimately these investments are being made to support our drive to deliver sustainably higher and more stable farmgate prices and returns over the long-term,” Mr Helou said.