Murray Goulburn secures lucrative cheese contract

02 February 2016

Murray Goulburn (MG) has secured a five-year national private label contract to supply Coles brand Australian cheese. This 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 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 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 co-operative 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.

“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.