Murray Goulburn wins Coles cheese deal

Dairy co-operative Murray Goulburn has snatched a contract from competitor Bega, to supply home brand cheese to Coles for the next five years.

MG has added the cheese deal to a ten-year partnership announced with Coles in 2014, to supply daily pasteurised milk for Coles’ home brand for sale in Victoria and NSW.

The co-operative said it had won the contract over Bega thanks to recent efficiency gains.

“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.

MG has announced plans to invest up to $145 million to “significantly increase ‘ready-to-serve’ cheese capacity and capabilities” at its new customer cheese plant in Cobram.

MG managing director Gary Helou was pleased to announce the Coles deal.

“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% controlled by Australian farmers,” he said.

“MG is pursuing a growth and value creation strategy to deliver profitable growth and insulation from the challenges of volatile global dairy commodity prices.”

Bega Cheese chief executive Aiden Coleman told the ABC he expected prices were the dominant factor in the contract’s allocation.

“We went into a competitive tender process at the end of the calendar year and Coles have chosen an alternative supplier based solely on pricing I should imagine,” Coleman was quoted as saying.

“We see this as an ongoing competitive component process of dealing in the industry, these private label contracts do come and go and we’ve experienced this before, so it’s not an unusual circumstance.”