Blog: How Parmalat has received another boost in Australia
Dean Best | 3 April 2014
Days after Parmalat announced it had acquired Australian dairy and fruit juice firm Harvey Fresh comes news of a deal of another sort for the Lactalis-owned Italian dairy giant.
Parmalat has secured a new, ten-year contract to supply milk to stores in the Australian state of Queensland owned by Woolworths Ltd, the country's largest retailer.
The milk processor was already Woolworths' nominated supplier in the state but the existing contract was for two years. The new deal is for an initial five-year period, with an option for a further five.
Woolworths also said it had awarded Parmalat a two-year contract further south in New South Wales.
The agreements, among a batch of contracts announced by Woolworths today (3 April), will cheer Parmalat, although, before the deals were announced, one industry watcher suggested the company may have been after more agreements.
"Parmalat ranks as the sixth-largest in terms of milk intake and is one of the two major milk processors in Australia. Its current business model has it very focussed on fresh milk and dairy products, which has meant a high level of exposure to the supermarket duopoly – probably not a strength. Parmalat hold the private-label supply contracts in New South Wales and Queensland. Woolies are to announce its next set of contracts tomorrow, and it wouldn't be surprising if Parmalat pick up a couple more," Jo Bills, director of food industry consultants Freshagenda, said yesterday. "Parmalat have taken a bit of hit from Coles awarding east coast contracts to Murray Goulburn and Norco, so I reckon would have been pretty keen in their negotiations."
Woolworths' latest contracts show Parmalat has not picked up new states - with deals elsewhere with Brownes Group, Fonterra and Lion.
However, its new agreements with Woolworths will provide a boost to Parmalat, which, through private-label contracts and M&A, bolstered its business in Australia.
Click here for our analysis of Parmalat's acquisition of Harvey Fresh, which includes the views of Freshagenda's Jo Bills and Rabobank's Michael Harvey.
US fans of British chocolate imports have taken to social media to vent their frustration after Hershey earlier this week reached a settlement with an importer to stop distributing British-made candy ...
Ads are commonly a bone of contention in this industry, with food manufacturers regularly coming under fire for what they believe is creative use of media. ...
Singapore-based agribusiness giant Wilmar International is to publish more information on how it sources its palm oil, a move welcomed by environmentalists....
- Premier Foods CEO expects UK supermarket rebound
- Why Post is increasing its exposure to cereal
- Briefing: The risks and rewards of e-tail in China
- Unilever must "speed" response to consumer trends
- just-food's pick: Natural Products Expo top 10
- Post Holdings strikes deal to acquire MOM Brands
- Up & Go breakfast drinks set for UK launch
- Crisp maker Sibell acquires Spain's Celigueta
- Hershey linked to takeover of jerky maker Krave
- Greencore expands UK, US sales
- 10 Key Trends in Food, Health and Nutrition 2015
- The Sugar Backlash and its Effects on Global Consumer Markets
- Unilever - Strategy and SWOT Report
- The Future of Retailing in the UK to 2017
- Global Consumer Trend Framework: Understanding Attitudes and Behaviors that Influence Global Consumption Habits