Fonterra set to snare 10-year Woolworths milk contract

Fonterra Australia is favoured to win a contract to process Woolworths’ own brand milk in Victoria for the next 10 years. The contract represents a significant milestone: Woolworths’ previous contracts were for a period of one year only.

Fonterra will invest more than $30 million in a state-of-the-art milk processing plant at its Cobden site in south-west Victoria. The site will support 30 jobs once operational, plus additional work during the construction phase.

The two companies will work together to finalise a binding supply agreement.

“We want farmers and Fonterra to provide quality milk for our customers. Fonterra has told us that with the certainty of a long-term contract they and their farmers can invest and innovate,” said Woolworths Managing Director of Supermarkets Tjeerd Jegen.

“Changes like integrated seals for milk containers and new, state-of-the-art processing equipment would not be possible without the investment brought about by this certainty. It’s these innovations that will see better tasting, fresher milk available in Woolworths stores.

“We don’t want to see milk shipped long distances, which only adds cost and increases the time between the farm and the supermarket shelf. These new contracts mean local farmers will supply Victorian milk to Victorian families.”

The modernised facility at the Cobden site will be commissioned in early 2015.