Australian dairy group Lion has said the loss of milk contracts to supply Woolworths, the country’s largest grocer, will affect volumes at its plants.
Lion has lost contracts in Victoria and Western Australia in the latest set of deals announced by Woolworths.
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However, Fonterra won the contract in Victoria with a ten-year deal starting in February. Brownes Food Group will supply Woolworths’ stores in Western Australia for seven-and-a-half years from July.
Lion said it was “disappointed” to have lost the two contracts after putting up its “most competitive bid in each state”.
“Woolworths’ decision will impact volumes at Lion’s milk processing plants in Chelsea in Victoria and Bentley in Western Australia. We will work through the detailed implications of this with our teams over the coming weeks.
The milk processor retained deals in the Northern Territory, South Australia and Tasmania.
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