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Dairy company to supply Coles for five years

Australian company Warrnambool Cheese and Butter (WBC) has announced a five year deal to supply dairy products to Coles.

The new brand for the ASX-listed company called ‘Great Ocean Road,’ will be stocked exclusively at Coles and will include cheese and fresh milk products.

WCB said in a statement it will formalise the agreement with Coles shortly to supply a minimum of 4000 tonnes of cheddar cheese each year with the new branding from 2012.

It will also supply 50 million litres of milk from dairy farmers each year for five years.

WBC said the agreement will be positive for both its business and for Coles.

“The new deal signals a strategic relationship which is beneficial for both partners,” it said in the statement.

“Under the five year agreement, WCB will continue to build its branded consumer product business in cheese and other dairy products.”

Coles and the dairy industry have had a strained relationship since the supermarket giant’s decision to slash the price of milk to $1 per litre a year ago.

The dairy industry slammed the decision, saying it put dairy farmers’ livelihoods in jeopardy and that the “unsustainable” prices would lead to a mass exodus from the industry.

When contacted by Food Magazine to find out how they plan to ensure dairy farmers are looked after, a WBC spokesperson said they price is a decision made by the supermarket, and the only way to ensure prices won’t change again is to have it a contract.

“The important thing is to develop sustainable relationships with customers by putting into place terms that create value,” the spokesperson told Food Magazine.

“This is a premium product we’re supplying, and a quality brand, which puts us in a better place to be competitive and then be able to give good money to farmers.”

“That will mean we can supply good products, and keep farmers happy and in the industry.”

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